March 23, 2020
Small Business Loans Available in Response to COVID-19
The novel coronavirus (“COVID-19”) is here. While everyone is glued to their cell phones and smart TVs waiting to hear about the latest infection rates, governmental announcements, and death tolls, many small business owners are increasingly concerned about the toll that forced closures will have on their ability to meet ongoing obligations, continue to pay workers, and generate future revenue.
Rosenberg Martin Greenberg is continuing to monitor the situation to provide the best possible advice to businesses during this epidemic. Many of our clients have asked:
What kind of economic relief is available to small business owners in response to the coronavirus (“COVID-19”)?
Fortunately for small business owners, the U.S. Small Business Administration can provide an Economic Injury Disaster Loan (“EIDL”) to help small businesses cope with the economic effects of COVID-19. The purpose of the EIDL is to provide working capital to help small businesses and non-profit organizations of all sizes meet their financial obligations.
Who is Eligible?
In many states including Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, and West Virginia assistance through the EIDL program is available.
Terms of the Loan
The EIDL program offers loans with a maximum interest rate of 3.75% for small businesses and 2.75% for non-profit organizations. EIDLs can be used to finance accounts payable, debts, payroll, and other expenses.
The application process considers the business’ credit history, tax returns, and available collateral for any loans exceeding $25,000. The loan application can be found by clicking here. EIDLs are limited to $2,000,000 unless the business is considered a major source of employment to the state. Loan repayment terms vary by the applicant; however, a maximum repayment period of 30 years may be available.
The foregoing is only one of the resources available to small business owners during this crisis. More information will become available in the upcoming days and weeks. Rosenberg Martin Greenberg will continue to post material relevant to businesses as they manage through this situation. Until then, stay safe and, if you have any questions or need assistance during the loan application process, please feel free to give us a call.