While this is unchartered territory for all of us, please rest assured that Loan Mantra™ remains committed to our clients during this time of financial uncertainty. We hope the following will address your basic questions and concerns as it relates to impacts on your small business and SBA loan eligibility due to COVID-19:
Am I eligible for SBA assistance?
The U.S. Small Business Administration (SBA) is initializing a program called the Economic Injury Disaster Loan program. This program will offer small businesses with low-interest rate loans as a result of economic injury or suffering due to the Coronavirus. SBA’s Economic Injury Disaster Loans will offer up to $2 million in working capital to help small business owners overcome temporary losses of revenue.
How do I apply?
Each state or territory’s governor must coordinate with the SBA to submit a request for the Economic Injury Disaster Loan Program. At this point, Loan Mantra does not have specific information on availability of the Disaster Loan program in each state, only that the program is forthcoming. We expect the program will be available in most states and territories by 3/23. In the meantime, you can visit the SBA’s website for general information and continue to check this site for up-to-date information as well.
While Disaster Loan applications will be managed by the SBA directly, Loan Mantra will continue to coordinate with you on next steps regarding your loan application to determine the best options for you. We’re here to help you navigate the process.
What is a Disaster Loan?
According to the SBA, an Economic Injury Disaster Loan is eligible for the following criteria and terms:
- To pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. 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.