The information in this post was last updated on June 30th, 2020. It will be updated as new information is released.
As small businesses and entrepreneurs face fear and uncertainty brought by the COVID-19 (coronavirus) pandemic, the U.S Small Business Administration (SBA) has been working tirelessly to make vital resources and assistance available. On March 17th, the SBA announced new Economic Injury Disaster Loans (EIDL) for small business owners impacted by the Coronavirus.
The SBA is now offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury from COVID-19.
Read below to learn how your business could benefit:
SBA COVID-19 Disaster Injury Loan for Small Business Working Capital
Loans can be used for: Fixed Debts, Accounts Payable, Payroll, other bills that can not be paid because of the disaster’s impact.For more information regarding the:
- Collateral needed
- Fixed interest rate of 3.75 percent for small businesses, 2.75 percent for non-profits
- Long-term repayments with a maximum of 30 years
- History of revenue necessary
Please visit the Coronavirus Disaster Assistance page.
Things to know
Repayment does not start until 4 months after you sign the promissory note. You can put the payout on hold if you do not need the money immediately.
The credit scores of all owners with more than 20% ownership are extremely important. If your credit score was great in the past, and if it declined due to COVID-19, have proof of it.
The timeline from a complete loan application to payout is 3-5 business days. You will need to prove that the business is able to make the payments through operations (have a previous Profit & Loss report) and with a personal financial statement.
SCAM ALERT: There have been reports of scams COVID-19 Economic Injury Disaster Loans. To avoid these, remember THERE’S NO:
- Immediate deadline to apply
- Application fee
- Credit card information required
According to the SBA office of disaster assistance, “small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for a long-term, low-interest loan due to Coronavirus (COVID-19).”
This loan is only available for natural-born U.S. citizens or those with a valid permanent resident card(green card). As we find out about other economic support programs for those business owners who do not possess these qualifications, we will let the public know.
Applicants must additionally be able to show a loss effective January 31, 2020, to now and/or in the future, as compared to 2019 financials.
You can now begin the application process.
UPDATE: Due to problems caused by high traffic volume, the SBA has streamlined its application process requirements into a new three-part webform. Find the easy-to-follow online application form here.
START EARLY – the biggest reason for delays in processing is due to missing information. Make sure to complete all requirements before submitting.
Need assistance with your application? Find your local Small Business Development Center, Women’s Business Center, or SCORE mentorship chapter here. For up-to-date information on the help that the SBDC is providing, sign up for their email list.
If your business is suffering economically and has a current business loan with any lender, consider contacting your lender to request a loan modification (interest only payments, partial or complete payment abatement, etc.) for the months in number it will allow; the bank’s ability to respond will be dependent on the type of loan product you have such as SBA guaranty program loan, in house private bank loan, or online lender.
Want more help? Check out our growing list of small business resources to overcome COVID-19 HERE.
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