The U.S. Small Business Administration is introducing a faster qualification process so that small businesses impacted by COVID-19 coronavirus can access disaster assistance loans more quickly.
On Friday, the U.S. Small Business Administration announced that it would provide up to $2 million in disaster assistance loans to businesses impacted by COVID-19. These loans are a part of the Coronavirus Preparedness and Response Supplemental Appropriations Act, an economic injury disaster loan declaration recently signed by President Donald Trump.
The SBA’s Economic Injury Disaster Loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the coronavirus 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 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.
Historically, the SBA has required that any state or territory impacted by disaster provide documentation certifying that at least five small businesses have suffered substantial economic injury as a result of a disaster, with at least one business located in each declared county/parish.
But under the just-released, revised criteria, states or territories are only required to certify that at least five small businesses within the state/territory have suffered substantial economic injury, regardless of where those businesses are located.
The loans will also apply to current and future disaster assistance declarations related to coronavirus, according to a U.S. SBA press release.
The Wisconsin SBA in conjunction with the state is in the process of drafting an application in which businesses can declare that coronavirus has impacted their business, said Shirah Apple, public affairs specialist at the Wisconsin SBA.
However, it’s still not clear when the loans will become available for business owners.
“I think very soon,” Apple said. “We don’t have a specific time frame but we’ve been working all weekend with them to make this happen.”
Governor Tony Evers’ administration did not respond to a request for comment.
Although the applications are not yet available, Apple said businesses impacted by the virus should still reach out to their county emergency management offices, the Wisconsin Economic Development Corporation or the Wisconsin SBA to share how they have been affected.
“We’re working with the WEDC and the emergency management offices in Wisconsin,” Apple said. “As businesses contact us, we’re sharing that information with them so we can help this process along.”
As soon as the disaster assistance loans come online, the Wisconsin SBA will widely distribute the process and ensure that applications, both online and paper copies, will be readily available. Apple also encouraged businesses and nonprofits to explore SBA’s other lending programs, which could be better-suited for businesses depending on the company’s situation.
“We’re here to help small business,” Apple said. “Part of our mission is helping them recover from adversity and we’re right in the middle of that, so we’re here.”
For detailed information on SBA programs for the coronavirus, visit www.sba.gov/coronavirus and for information on all federal programs, visit www.usa.gov/coronavirus or www.gobierno.usa.gov/espanol for Spanish speakers.
