The Coronavirus has been having a significant impact on many of our businesses. Fortunately, The SBA is making available Disaster Relief Loans to help businesses to get through this event. Here is a summary of what you should know about these loans:
-They are extremely friendly and fairly easy to get (From the underwriting perspective). The low rates and extended amortization make for very low-cost loans to help you to get through these hard times. They may take a little work but should be worth it.
-These loans are for working capital and not to expand or refinance existing debt. They may be used to pay fixed debts, payroll, rent, accounts payable and other bills that can’t be paid because of the disaster’s impact. (When requesting a loan amount break out items like 6 months of payroll, loan payments, inventory, etc.) Compile a spreadsheet showing how much each of these items comprise to justify how much you will need.
-Loans of up to $2 million
-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 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.
-They are available to for profit and non-profits (Typically SBA loans are only available to for-profit companies, but they have made an exemption)
-They are administered directly through the SBA and not your local bank.
-On a case by case basis, loans offered under this program may have a forgiveness clause as a feature
For more information and to apply visit the Small Business Administration
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