On March 18, Governor Brian Kemp announced that the U.S. Small Business Administration (SBA) has given Georgia an official statewide disaster declaration due to the COVID-19 pandemic, paving the way for small businesses in all 159 counties to apply for much-needed financial assistance.
As people are being told to self-isolate or practice social distancing in order to stop or slow down the spread of COVID-19, a number of small businesses are facing hardship. Through either the loss of customers or the desire to help employees and others in the community during this difficult time, there are numerous financial demands on small businesses. This is why the SBA’s disaster declaration is so important.
SBA disaster loans ordinarily offer an affordable way for individuals and businesses to recover from declared disasters. In the case of COVID-19, the low-interest, long-term loans can be used by small businesses and nonprofits to continue operations, pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the pandemic’s impact.
SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to help borrowers overcome the temporary loss of revenue they are experiencing.
While the terms of the loan will be established on a case-by-case basis, here are some normal parameters:
- They typically have a 30-year repayment term.
- First repayments traditionally are not due for up to 12 months after receiving the first installment of the loan.
- Businesses will be expected to provide a tax transcript, financial statements and a profit and loss statement.
- Interest rates are 2.75% for nonprofits and 3.75% for small businesses.
According to the SBA, a decision on whether to approve a loan request is usually made within two to three weeks. Once approved, an initial disbursement of the loan amount will be made to the applicant within five days of receiving the signed loan closing documents.
More information, including about the loan application process, can be found here. Applicants are encouraged to apply online for a disaster loan or email SBA at email@example.com for more information. You can also call the SBA disaster assistance customer service center at 1‐800‐659‐2955.