The COVID-19 virus is having a significant impact on U.S. small businesses. If you are a business owner, you might be worried about the continuation of your small business. The U.S. Small Business Administration is offering low-interest federal disaster loans for small businesses suffering as a result of COVID-19. The SBA Economic Injury Disaster Loans (EIDLs) offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. Businesses may use these loans to pay fixed debts, payroll, accounts payable and other bills.
We encourage you to consider if you need a small business loan. It is best to apply online right away so that you can get access to the funds as quickly as possible. If you require a small business loan go to https://disasterloan.sba.gov/ela/ to apply online. All States qualify for the low interest disaster loans.
What is the interest rate?
The interest rate is 3.75% for small businesses. For non-profits the interest rate is 2.75%.
Is collateral required for the loan?
Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
What is the maximum length to pay back the loan?
The maximum length is 30 years. SBA is offering long-term repayments to keep the loans affordable. The terms are determined on a case by case basis, based upon each borrower’s ability to repay.
If you are unsure if you should apply for a small business loan, please do not hesitate to talk to your accountant.
As more information is forthcoming, we will continue to pass that information along to you.