If your business is struggling, you may be able to get some help from the federal Small Business Administration (SBA), which is authorized to provide loans to small businesses on an as-needed basis.
Traditionally, low-interest SBA Economic Injury Disaster Loans (EIDLs) are commonly granted on a local level following a natural disaster (such as a hurricane or a tornado). But right now, they are authorized for small businesses in all U.S. states and territories due to the COVID-19 pandemic. EIDLs are just one of the resources provided by SBA.
Due to COVID-19, the SBA is providing advances of up to $10,000 on EIDLs for businesses experiencing a temporary loss of revenue. The $10,000 grant, which you request when you fill out your EIDL application, should arrive within days of your loan application, according to the SBA. Whether you ultimately qualify for an EIDL, the grant money is yours and does not have to be repaid.
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c) (19) veterans organizations affected by COVID-19.
COVID-19 EIDLs are designed to provide economic relief if your business is currently experiencing a loss of revenue due to the pandemic. The $10,000 loan advance exists to provide more immediate relief while you wait for the proceeds of your regular EIDL loan.
You can apply for an EIDL of up to $2 million to provide working capital for expenses such as fixed debt and payroll costs. The interest rate is 3.75% and the loan term can be as long as 30 years. The COVID-19 EIDL includes an automatic one-year deferral on repayment, though interest begins to accrue when the loan is disbursed.
Small business owners can apply for an EIDL and advance, now.