What You Need to Know About SBA’s Disaster Loan
Need help applying? Contact your SBDC advisor. Request Advising Here.
SBA Economic Injury Loan – Step by Step Recorded Webinar
Slide Deck from the webinar: SBA Disaster Relief Loan Assistance PPT
I’ve heard of so many different loan programs and I’m not sure which one to apply for, is there a chart to compare them? Yes there is! Please check out the Virginia SBDC - SBA Loan Overview_4.3.2020.
The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
Here's key information you need to know:
What is the EIDL?
The EIDL is a low-interest, fixed-rate loan that can provide up to $2 million in assistance for a small business. SBA’s Economic Injury Disaster Loan (EIDLs) funds come directly from the U.S. Treasury. Applicants do not go through a bank to apply, and instead, apply directly to SBA’s Disaster Assistance Program.
Actual loan amounts are based on the amount of economic injury. These loans provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing because of COVID-19. The EIDL helps meet the necessary financial obligations that your business or private non-profit organization could have met had the disaster not occurred. EIDLs do not replace lost sales or revenue.
What is the EIDL $10,000 emergency grant?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act which was passed on 3/27/2020 establishes an emergency grant to allow an eligible entity who has applied for an EIDL loan due to COVID-19 to request an advance on that loan, of not more than $10,000, which the SBA must distribute within 3 days. It also states that applicants shall not be required to repay advance payments, even if subsequently denied for an EIDL loan. To apply for the EIDL loan, click here.
Who can apply?
In order to be eligible, you must be a small business (500 employees or less).
How can the loan be used?
The loans are for working capital which includes fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the disaster’s impact. It does not cover lost sales.
How much can I apply for?
You will not be asked how much you would like to borrow. The SBA uses the information you provide to determine the loan amount. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.
What is the lending criteria?
Credit History – Applicants must have a credit history acceptable to SBA. Traditionally, this has been around 620, but SBA will look at extenuating circumstances and consider the impact of the pandemic on the business.
What are the terms?
The interest rate is 3.75%
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.
When can I apply?
Applications for Economic Injury Disaster Loans are now open in Virginia. Click here to access the loan application.
How do I navigate the application system?
Gather Your Materials
Employer Identification Number (EIN) for business applicantsInsurance information
Other key information:
Use Internet Explorer or Mozilla Firefox to apply.
What’s next? What should you expect?
You will receive email confirmation that your application has been submitted
I still have other loan question(s) for the SBDC, how can I get an answer?
Kindly contact usand we will try to get back to you within 2 business days
Avoid COVID-19 scams!
Scammers are using the Small Business Administration’s (SBA) name to con small businesses and individuals during the COVID-19 crisis through phone calls, emails, text messages and letters.
If you are contacted by someone claiming to be from the SBA, suspect fraud.
Where can I sign up for updates from the Virginia Small Business Development Centers?