Commentary

U.S. Small Business Administration Economic Injury Disaster Loans

There has been a lot of information coming out in the news about funding relief for small businesses in Virginia.  While this is a rapidly changing environment, here are the current details of the U.S. Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL) in Virginia:

As of March 19, 2020, SBA has issued a Disaster Designation for Virginia. SBA Administrator Jovita Carranza said “Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the Coronavirus (COVID-19) since Jan. 31, 2020, may qualify for Economic Injury Disaster Loans (EIDL) of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.”

EIDL loans may be used to pay fixed debts, payroll, accounts payable, short-term debt,  and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.

SBA offers EIDL loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years with a deferral of payments for up to 12 months. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. There are no application fees for the EIDL Program.

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela.

Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance.

Individuals who are deaf or hard‑of‑hearing may call (800) 877-8339. Completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX  76155.

If you have a current SBA loan, lenders have been given unilateral authority to offer deferral of payments up to six months to businesses who have been current on their loan payments prior to the Disaster Declaration.  The SBA is encouraging lenders to utilize this option liberally. Please contact your bank directly to request a deferral and the requirements can be found in on Pages 69-70 in SOP 50 57 2.

https://www.sba.gov/sites/default/files/files/SOP_50_57_2_1.pdf.

If you have additional questions, please don’t hesitate to contact us.