The federal Small Business Administration has begun accepting applications for Economic Injury Disaster Loans from businesses that have been impacted by COVID-19. These loans are designed to provide working capital to help small businesses meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.
Loans of up to $25,000 can be obtained without any collateral and up to $2,000,000 with collateral. The Small Business Administration takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral but requires borrowers to pledge what is available. The interest rate for these loans is 3.75% with a maximum term of 30 years. There is no cost to apply and there is no obligation to take the loan if offered.
We’re hoping the economic relief package being discussed at the federal level will provide substantial cash infusions for small business owners, but in the meantime this program may provide economic relief for you. More information is available here:
ESD Presentation on SBA Disaster Loans