The information in this post was last updated on March 27th, 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
The loan can be used for: Fixed Debts, Accounts Payable, Payroll, other Bills. For more information regarding the:
- Collateral needed
- The fixed interest rate
- 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.
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).”
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 simplified its online application procedure. In place of the previous webform, the application is now an easy download/fill-in/upload process. All required documentation can be found and submitted here.
START EARLY – the biggest reason for delays in processing is due to missing information. Make sure to complete all filing requirements before uploading and submitting.
At this time there are no grant programs in place. However, the IL SBDC has already requested that option on the State’s behalf. For up-to-date information on the help that the SBDC is providing, sign up for their email list.
Want more help? Check out our growing list of small business resources to overcome COVID-19 HERE.
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