Also included in the $2 trillion relief bill are provisions for small business.
· $350 billion in loans for small businesses to cover monthly expenses like payroll, rent, and utilities.
· 8 weeks of cash flow assistance
· Loans would be issued by community banks and backed by the Federal government
· Availability ends 06/20/2020
· Loans portions paying payroll, interest on mortgage obligations, rent, and utilities would be forgiven if businesses maintain payroll during the entire crisis
· Current loan rate 3.75%. Could change.
· SBA looking into waiving requirement businesses not be able to access credit elsewhere.
Application process
Process for Accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
Apply For A Disaster Loan
You can apply online for all types of SBA disaster assistance loans. The online application is the fastest method to receive a decision about your loan eligibility. You have the option of submitting a paper application by mail. For either application, you must submit the completed loan application and a signed and dated IRS Form 4506-T giving permission for the IRS to provide SBA your tax return information. You may also apply in person at any Disaster Recovery Center and receive personal, one-on-one help from an SBA representative. For information or to find a location near you, please contact our Customer Service Center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov. The Three-Step Process: Disaster Loans The Three-Step Process: Disaster Loans (en Espanol) Required Information to Complete the Application After a Presidential disaster declaration, you must first register with the Federal Emergency Management Agency (FEMA). To obtain a registration number, call FEMA at 1-800-621-3362 (TTY: 1-800-462-7585) or visit DisasterAssistance.gov. The following information is required to complete the SBA online application:
· Contact information for all applicants
· Social security numbers for all applicants
· FEMA registration number
· Deed or lease information
· Insurance information
· Financial information (e.g. income, account balances and monthly expenses)
· Employer Identification Number (EIN) for business applicants
How to Repay a Disaster Loan To make a one-time payment or schedule recurring monthly payments, register on Pay.gov and select the 1201 Borrower Payments option. There are several ways you can make a payment on your disaster loan: by phone, by mail or online. To make a payment, contact the SBA disaster customer service center at 1-800-659-2955 (TTY: 1-800-877-8339). There is no fee for this service. You may also send a check or money order to the SBA. Please include your loan number on your check and your payment coupon, if available. Make your check payable to the U.S. Small Business Administration.