The coronavirus pandemic has changed the daily routines for everyone throughout the world. Many essential businesses are still up and running. However, small businesses have been hit hard by the mandatory safety measures we are all taking.
Fortunately, resources are available to help small business owners and their employees during this difficult time. Relief programs including the stimulus package, and other provisions set by the government, are here to help. They are intended to help struggling businesses make ends meet until we are back on our feet again.
3 Useful Disaster Relief Resources for Small Businesses During the coronavirus
During this time of uncertainty, it’s important that all small business owners know where to turn to for help. Here are three useful resources that can assist with your financial issues during the coronavirus outbreak.
The United States Small Business Administration, or SBA, can guarantee loans for businesses with fewer than 500 employees. These loans have terms up to 10 years and interest rates up to 4%. Small business owners may apply for loans as much as $10 million dollars. Both banks and credit unions provide these loans. Businesses who qualify due to the coronavirus pandemic can also get a loan deferment for as long as six months, allowing them to have more time to pay. These loans may be forgiven if the company can maintain its payroll for at least eight weeks at the employees’ usual salary levels.
Expanded Access to U.S. Small Business Disaster Relief Loans
In conjunction with the disaster relief assistance program, the SBA now offers expanded access to its Economic Injury Disaster Loans. Now small businesses and nonprofits that qualify can get a working capital loan that’s up to $2 million.
These SBA loans have an interest rate of 3.75% for all small businesses and 2.75% for nonprofits. The terms for repayment vary based on the applicant, however, it’s possible for the repayment period to be as long as 30 years. The recent stimulus package allows for both sole proprietors and businesses that have fewer than 500 employees to qualify. Applicants for this type of loan do not need to provide a personal guarantee for any loans that are less than $200,000. There is also the option for deferred payments for up to four years. The coronavirus disaster is hoped to have long passed by then.
Emergency Grants for SBA Economic Disaster Loan Applicants
Emergency grants for SBA Economic Injury Disaster loan applicants are up to $10,000. Due to the coronavirus, these are offered even if your business is denied a loan. The loan may be used to cover sick leave for an employee, help you maintain payroll during this difficult period, or help your business with other financial needs such as paying for rent and utilities.
Additional Facts About Applying for an SBA Loan During the coronavirus pandemic
If you are considering an SBA loan, there are a few things to keep in mind. The SBA doesn’t offer loans itself. Instead they work along with lenders who process the applications and provide the loans. The lenders are also the ones responsible for setting the credit requirements and determining eligibility.
There are several options for small businesses that are looking for an SBA lender. You can search online on your own for a lender near you, or use a referral service that can help with comparing your options.