Source: https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-updates-criteria-states-requesting-disaster-assistance-loans-small-businesses-impacted
Release Date: Tuesday, March 17, 2020
Release Number: 20-26
Contact: Jennifer.Kelly@sba.gov, (202) 205-7036
WASHINGTON – Today,
as part of the Trump Administration’s aggressive, whole-of-government
efforts to combat the Coronavirus outbreak (COVID-19) and minimize
economic disruption to the nation’s 30 million small businesses, U.S.
Small Business Administration Administrator Jovita Carranza issued revised criteria for states or territories seeking an economic injury declaration related to Coronavirus (COVID-19).
The relaxed criteria will have two immediate impacts:
- Faster, Easier Qualification Process for States Seeking SBA Disaster Assistance. 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. 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.
- Expanded, Statewide Access to SBA Disaster Assistance Loans for Small Businesses.
SBA disaster assistance loans are typically only available to small
businesses within counties identified as disaster areas by a Governor. Under
the revised criteria issued today, disaster assistance loans will be
available statewide following an economic injury declaration. This will
apply to current and future disaster assistance declarations related to
Coronavirus.
“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 (COVID-19) outbreak. 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,” said Administrator Carranza. “To that end, the SBA is
relaxing the criteria through which states or territories may formally
request an economic injury declaration, effective immediately.
Furthermore, once an economic injury declaration has been made in a
state or territory, the new rules allow the affected small businesses
within the state or territory to apply for a disaster assistance loan.”
SBA’s Economic Injury Disaster Loans offer up to $2 million in
assistance for each affected small business. These loans can provide
vital economic support to small businesses to help overcome the
temporary loss of revenue they are experiencing.
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 statewide
to small businesses and private, non-profit organizations 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, the information on the
application process for Economic Injury Disaster Loan assistance will be
made available to affected small businesses within the state.
- 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. 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.
For additional information, please visit the SBA disaster assistance website at SBA.gov/Disaster.
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About the U.S. Small Business Administration
The
U.S. Small Business Administration makes the American dream of business
ownership a reality. As the only go-to resource and voice for small
businesses backed by the strength of the federal government, the SBA
empowers entrepreneurs and small business owners with the resources and
support they need to start, grow or expand their businesses, or recover
from a declared disaster. It delivers services through an extensive
network of SBA field offices and partnerships with public and private
organizations. To learn more, visit www.sba.gov.
