During the Coronavirus Outbreak the Small Business Administration Provides Business Distaster Loans
SBA Small Business Disaster Loans are available. The U.S. Small Business Administration (SBA) has never faced a challenge like the COVID-19 outbreak, but they’re stepping up to help small business owners who are suffering financially during these uncertain times.
The SBA’s mission is “to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.” While most disaster loans the SBA has made in its history went to individuals for homes damaged by natural disasters (weather incidents), the coronavirus pandemic certainly qualifies, as well.
What is the official guidance on the SBA Small Business Disaster Loans Program?
“The U.S. 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). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.”
SBA Economic Injury Disaster Loan
The SBA will extend credit whenever the Federal Government issues an Economic Injury Disaster Loan assistance declaration. These SBA Small Business Disaster Loans are available statewide to small businesses and private, non-profit organizations to help alleviate economic injury due to the Coronavirus (COVID-19). The business loans offer up to $2 million in assistance and can help small businesses to overcome the temporary revenue losses they may expereince during this COVID-19 crisis.
Here is a current list of areas eligible for SBA disaster loans. In fact, Massachusetts is listed in large caps, showing the crisis here in our own Commonwealth.
What Can the SBA Small Business Disaster Relief Loans Can Be Used For?
Here’s a few qualifying costs for the SBA Disaster Relief Loans during the Covid-19 outbreak:
- Fixed debts
- Accounts payable
- Other bills that can’t be paid as a result of the disaster’s impact
For small businesses, the interest rate will be 3.75%. The interest rate for non-profits is 2.75%.
Each case for SBA Small Business Disaster Loans will determine the terms for these loans, and they will depend upon the borrower’s repayment ability. SBA does offer loans with long-term repayment options up to a maximum of 30 years in order to help keep borrowers’ payments affordable.
In addition, Congress is finalizing plans for a loan forgiveness program, which will provide businesses with additional payroll, sick time and family leave financial assistance. Watch our blog for more details.
These SBA Economic Injury Disaster Loans make up one piece of the federal government’s economic response to the Coronavirus crisis, and more details will be forthcoming as time goes on. Worthtax has always shown a commitment to helping our clients navigate these uncertain waters that we currently face as a business community during the COVID-19 outbreak.
Do You Need Help Navigating the Official Guidance Program for the SBA Small Business Disaster Relief Loans?
Are you in a position where your company could be in jeopardy, or you just need to cover some expenses until this Coronavirus goes away? Perhaps you want to discuss applying for one of these loans for your business? Contact Alex Franch, BS EA at 781-849-7200 with any questions you may have. It is worth noting that Joseph Cahill and Associates/Worthtax, remains to keep our locations in Norwell and Dedham, Massachusetts. open so we can assist you in making the application process go smoothly. Also, while the IRS did extend the deadline to file tax returns to July 15, 2020. “Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.”
Massachusetts DOR has not made such an announcement as of March 23, 2020. This means, you will still be reponsible for any fees and penalties that may be due with regard to your tax filing. Now that people are home they will have time to get their tax documents together. Get ahead of the rush and upload the information to our ENCRYPTED portal here.