The U.S. Small Business Administration (SBA) is offering federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
According to Matt Meadors, President & CEO of the Greater Waco Chamber of Commerce, the Office of Governor Greg Abbott has requested an emergency declaration from the SBA so that Texas businesses statewide will be eligible for disaster loan assistance. “That declaration is imminent,” stated Meadors, “and will likely be made no later than Friday, March 20.”
With COVID-19 identified as a qualifying event, Economic Injury Disaster Loans (EIDL) will be made available for businesses, franchisees, small agricultural coops, and some private non-profits throughout the state who have suffered substantial economic injury due to COVID-19.
“The current public health crisis is impacting our community in many ways, and small businesses are especially hard hit. Our team is working diligently to bring relevant resources and funding opportunities, as well as policy updates, to the business community of greater Waco, and posting regular updates on our website at www.wacochamber.com/COVID-19. These loans are one of the many ways the federal and state government will be responding to help mitigate the economic impact of the Coronavirus on our communities. The Chamber stands with our businesses and community partners, and we look forward to emerging from these times stronger, together,” says Meadors.
Unlike normal SBA 7a loans, these are directly through the SBA. EIDLs will be up to $2 million to provide the necessary working capital to help businesses overcome the temporary loss of revenue until normal operations resume.
These loans may be used to pay fixed debts, payroll, rent or lease payments, 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 and 2.75% for non-profits. 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 on the borrower’s ability to repay.
First payments on a COVID-19 related EIDL may be deferred for up to one year.
You can apply for an EIDL at disasterloan.sba.gov. Online is the fastest way to apply and learn about your business’ eligibility. According to the SBA, applicants can expect a turnaround time of three weeks after submitting a complete application.
Before applying, you must first register with the Federal Emergency Management Agency (FEMA). To obtain a FEMA registration number, call FEMA at 1-800-621-3362 or visit www.DisasterAssistance.gov.
For questions, please contact the SBA Disaster Assistance customer service center at 1-800-659-2955 or email disastercustomerservice@sba.gov.