The U.S. Small Business Administration is rolling out a series of disaster assistance loans in an effort to help offset financial losses caused by the ongoing coronavirus crisis.
The loan process, according to SBA administrator Jovita Carranza, is intended to simply the qualification process for seeking disaster assistance, and expanding that access statewide, instead of the traditional county-by-county.
"We're very encouraged that banks and financial institutions are responding to the president's efforts to mobilize an unprecedented public-private response to the coronavirus outbreak," Carranza said, in a release. "As a result, most small businesses that need credit during these uncertain times will be able to obtain it. However, our goal is to ensure that credit is available to any and all small businesses that need credit, but are unable to access it on reasonable terms through traditional lending channels."
The SBA typically requires any state or territory impacted by a disaster to 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 lcoated in each declared county. Under the new qualification guidelines, a small business looking help through this expanded program would only need to certify that at least five small businesses within the state have suffered substantial economic injury, regardless of where those businesses are located.
The SBA's economic injury disaster loans offer up to $2 million in assistance for each affected small business. Loans like this, officials say, can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
To become eligible, a state must request access to the program, and then qualify for access to the loans, which would then be available to small businesses and private, non-profit organizatons. Loans may be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the coronavirus' impact, according to a release. The interest rate for small businesses is 3.75 percent, and for non-profits, 2.75 percent.
Businesses can then take up to 30 years to repay the loan, based on their ability to repay it.
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