Help is on the way for small businesses affected by COVID-19 related economic disruptions.
The U.S. Small Business Administration is offering states and territories low interest federal disaster loans of up to $2 million to small businesses suffering substantial economic injury as a result of the virus.
According to Matt Coleman, regional communications director for the SBA Atlantic region, once a governor makes a formal request to SBA certifying that at least five small businesses in a designated area have suffered substantial economic injury due to the COVID-19 pandemic, the SBA will review the request and issue an Economic Injury Disaster Loan declaration, thus freeing up to $2 million per small business.
EIDL loans can give small businesses the boost they need to overcome temporary loss of income, Coleman explained. They are part of the overall federal response to COVID-19.
Our agency will work directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation.
– Jovita Carranza, SBA administrator
“The president took bold, decisive action to make our 30 million small businesses more resilient to coronavirus-related economic disruptions. Small businesses are vital economic engines in every community and state, and they have helped make our economy the strongest in the world,” said SBA Administrator Jovita Carranza in a prepared statement. “Our agency will work directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation.”
Additionally, the SBA will continue to assist small businesses with counseling and navigating their preparedness plans through its 68 district offices and other resource partners located around the country.
EIDL loans may be used to pay fixed debts, payroll, accounts payable and other bills. Interest rates are 3.75 percent for small businesses without credit available elsewhere and 2.75 percent for nonprofits. Businesses with credit available elsewhere are not eligible for EIDL loans.
To keep payment affordable, long-term repayment is offered up to 30 years.
New Jersey small businesses have used EIDL loans before. In Burlington, Camden and Gloucester counties, they were offered for severe weather and flooding in June 2019. They were also offered as a result of Superstorm Sandy in 2012.