March 10th, 2020 - 2:52 pm
Report by Rick Schweitzer, NEFI Regulatory Counsel (rpschweitzer@rpslegal.com)
The Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). The loans would be processed through state or territorial governments.
SBA's Economic Injury Disaster Loans offer up to $2 million in assistance for a small business, and repayment terms of up to 30 years to keep payments as low as possible. Terms are determined on a case-by-case basis, based upon each borrower's ability to repay.
The loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster's impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for nonprofits is 2.75%.
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