The SBA moved to make it easier and faster for state’s to gain eligibility for local small businesses impacted by the coronavirus outbreak to get loans.
Update for March 31, 2020: In addition to the SBA’s Emergency Disaster Loan program, the SBA is administering a second loan program called the Paycheck Protection Program, which will provide $349 billion to small businesses. You can read more about the Paycheck Protection Program on Workest.
The Small Business Administration (SBA) revised the criteria for states seeking eligibility for small business impacted by the coronavirus outbreak to apply for disaster relief loans. Governors can now seek statewide eligibility, rather than asking for approval for individual counties.
Many businesses are facing a money crunch, and seeking financial help during work stoppages or orders to close their business due to the spread of the coronavirus. Last week, President Donald J. Trump announced the SBA would provide aid through the availability of low-interest loans to impacted small businesses.
Many businesses were confused on how to apply for the SBA relief loans, however.
Under previous criteria, governors formally requested that counties within their state be declared eligible for disaster relief loans from the SBA. Under the new criteria issued by the SBA on March 17, governors can request that their entire state be declared eligible for coronavirus relief loans.
Under the new criteria issued by the SBA on March 17, governors can request that their entire state be declared eligible for coronavirus relief loans.
This means businesses throughout an eligible state can apply for the loans, which can go up to $2 million at interest rates between 2.75% for nonprofits and 3.75% for small businesses.
The SBA also relaxed the criteria for gaining eligibility to the program. Under the previous process, governor’s had to provide documentation certifying that at least 5 small businesses have suffered substantial economic injury as a result of a disaster, with at least 1 business located in each declared county.
Under the new rules for the coronavirus relief loans, governors only have to certify that at least 5 small businesses within the state/territory have suffered substantial economic injury, regardless of where those businesses are located. This will likely expedite the approval process for state eligibility, which the SBA previously said was no more than 48 hours.
The time it takes for a small business to receive a credit decision once a small business submits a loan is 2 to 3 weeks, and disbursements upon approval can be within 5 days.
The SBA said that small businesses can apply for the loans directly on their website at www.sba.gov/disaster. Business owners can call the disaster customer service center at 800-659-2955, or email [email protected]. The deaf and hearing impaired may call 800-877-8339.
Editor’s Note: Neither Workest or Zenefits is affiliated with the Small Business Administration (SBA) or a lending organization. This article is intended for informational purposes only.