Posted June 17, 2020
The U.S. SBA is offering low-interest federal disaster loans for working capital to small businesses impacted by the COVID-19. This program had previously been restricted to agricultural businesses, but has now been reopened to any eligible business.
Through this process, SBA is providing an emergency cash advance of up to $10,000 ($1,000 per employee, $10,000 max) that you will not need to pay back.
Who can apply?
In order to be eligible, you must be a small business (in most industries, 500 employees or less).
How to Apply?As of 3/30/2020, SBA has created a streamlined application process. You must complete the application in one sitting. The last step of the application process contains a checkbox to be considered for the $10,000 advance. You’ll also need your banking information. More info or to apply, click here.
How do I access the $10,000 emergency cash advance?
The SBA is providing UP TO $10,000 ($1,000 per employee, $10,000 max) to applicants that does not need to be repaid. To be considered for this advance, you must submit an application. The funds can be used for employee leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss. On the application, check the box on the third screen (“additional information”) to be considered for this advance.
How can the loan be used?
The loans are for working capital which includes fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the disaster’s impact. It does not cover lost sales.
How much can I apply for?
You will not be asked how much you would like to borrow or how much you need as a cash advance. The SBA uses the information you provide to determine the loan and advance amounts. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.
What is the lending criteria?
Other helpful info:
What’s next? What should you expect?