The Small Business Administration is ready to help
Updated: Mar 25
The Small Business Administration has an existing Economic Disaster Loan program that is now being used to help with the COVID-19 pandemic. The program can provide cash infusions for damage and payrolls within five days after the application is completed through low-interest loans. Loans available through this program are being processed as rapidly as possible. If you think you may need one, apply immediately at https://disasterloan.sba.gov/ela/. Loan rates differ based on your county, so review the disaster notice by clicking on the “Eligible Disaster Areas” bubble to find your locality’s interest rate range. Then click “3-Step Loan Process” to get a picture of how the process works.
Other paths to capital through SBA
There are other loan programs worth checking out, and, again, speed is of the essence as thousands of companies will be applying.
The 7(a) program offers loan amounts of up to $5,000,000 and is an all-inclusive loan program deployed by lending partners for eligible small businesses within the United States and its territories. The uses of proceeds include: working capital; expansion/renovation; new construction; purchase of land or buildings; purchase of equipment and fixtures; lease-hold improvements; refinancing debt for compelling reasons; seasonal line of credit; inventory; or starting a business.
The Express loan program provides loans of up to $350,000 for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.
The Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.
The 504 loan program is designed to foster economic development and job creation and retention. The eligible use of proceeds is limited to the acquisition or eligible refinancing of fixed assets.
The Microloan program involves offering loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery and equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan being $14,000.
In addition to supporting the programs, the SBA will help match you to a lender. Follow this link to get assistance in finding a lender who works with these programs: https://www.sba.gov/funding-programs/loans.
Finally, check out these two links:
The SBA has always been a part of building up businesses that have faced challenges of competition, destruction, and — now — health threats. Their page changes frequently. Come back for updates on new programs, expansion of current ones, and tips on how to address these challenging times. https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
The SBA has also provided a directory to local assistance. Your competition for attention should be less frenetic there than in national programs. One suggestion to get started is to leave the “Find” and “Provided By” search boxes blank and only enter your zip code. Review the resources listed before choosing one or more to explore their assistance further. https://www.sba.gov/local-assistance/find/