The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital to California small businesses suffering substantial economic injury as a result of COVID-19.
Small businesses, private nonprofit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of COVID-19 since January 31, 2020, may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.
These loans may be used to pay fixed debts, payroll, accounts payable 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 loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
Credit Requirements:
• Credit History – Applicants must have a credit history acceptable to SBA.
• Repayment – Applicants must show the ability to repay the loan.
• Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. The deadline to apply for an Economic Injury Disaster Loan is December 16, 2020.
For more Information about SBA disaster assistance programs, and to apply directly online, go to: www.sba.gov/disaster or, contact SBA’s Customer Service Center at: 1-800-659-2955 / 1-800-877- 8339 (TTY) Or by email at: disastercustomerservice@sba.gov