How To Apply For A Coronavirus Small Business Disaster Assistance Loan

By Dan Doherty

The Coronavirus Aid, Relief, and Economic Security (CARES) Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed on March 27, 2020. It allocates $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.

CARES loans can be for up to 2.5 times a business’s monthly payroll costs, not to exceed $10 million. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

To learn more, check out this article: Coronavirus Loans: A Small Business Guide to the Coronavirus Aid, Relief, and Economic Security (CARES) Act

NOTE: The content below is related to Disaster Assistance Loans from the U.S. Small Business Administration, which is a different program then the CARES Act loan described above.

Where to apply for a coronavirus Disaster Assistance Loan for small businesses

As small businesses continue to feel the effects of the COVID-19 public health emergency, the federal government will offer low-interest disaster loans of up to 2 million dollars.

Here’s how to apply for a Coronavirus disaster assistance small business loan, as well as links providing more detail on the government’s emergency disaster loan process related to COVID-19.

The U.S. Small Business Administration (SBA) is offering low-interest disaster recovery loans to small businesses impacted by COVID-19.

For complete information on where to apply for a disaster assistance loan, visit the SBA’s Small Business Guidance & Loan Resources page.

Disaster assistance loan application process

If you’re wondering how to apply for a coronavirus small business loan, first you should visit the SBA’s Disaster Assistance page.

Applicants are encouraged to apply online for disaster loans at the Small Business Administration website.

If you do not have access to a computer or smartphone, you can call the SBA at 1‐800‐659‐2955 for assistance.

In the past business owners have been able to apply for small business disaster assistance loans in-person at a disaster assistance center, but due to restrictions on open businesses and the risk of transmitting coronavirus it is both faster and much safer to apply online. You can also apply by mail, but if you’re able to apply online it is a much simpler way to request a loan.

Due to high traffic, the SBA is recommending that you apply online at non-peak hours, from 7 pm to 7 am EDT.

There are three steps in the SBA disaster loan process:

  1. Apply for loan
  2. Property is verified and a loan processing decision is made
  3. Loan closed and funds dispersed

Here is an SBA document outlining the complete 3-step process: View PDF

The SBA indicates that they will arrive at Coronavirus small business loan decisions within 2-3 weeks, although given the current extent of the COVID-19 situation it may take longer for them to deal with the amount of disaster loan applications.

If your loan is approved they will send you Loan Closing Documents, and once those are submitted an initial disbursement of disaster loan funds will be made within five days.

Who can apply for a coronavirus disaster assistance loan

If your small business is suffering economic loss due to the pandemic and you live in an area that is deemed a disaster, you may be eligible for these loans.

One requirement is that your business must not be to secure alternative funding.

A second requirement is that your business must be located in a government-declared disaster zone. Once government officials declare a disaster in your area then your business will be able to to seek these emergency funds.

View areas eligible for SBA disaster loans and a list of Presidential and SBA Agency Declared Disasters.

Terms of Small Business Administration disaster loans

Terms and conditions for small business disaster loans are based on the ability of your company to repay the loan. A credit check will be performed prior to the SBA having a verifier estimate your damage.

The period of repayment for disaster loads cannot exceed 30 years. The interest rate is set at 3.75% for small businesses. If you are a nonprofit then your interest rate is 2.75%.

Additional resources on the coronavirus and small business disaster loans


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