For businesses struggling to remain afloat during the COVID-19 crisis, a little help goes a long way. The Small Business Administration (SBA) has helped entrepreneurs grow and recover their small businesses for nearly 70 years. During these uncertain times, the SBA continues to offer its support to the nation’s 30 million small business owners with various programs and funding.
We’ve put together a breakdown of current resources available for small businesses through the SBA during the coronavirus pandemic.
Common Issues for Businesses Facing The Affects of COVID-19
With 30% to 40% of America’s economy shut down and no timeline for when or how fast the market will recover, it’s important to pay attention to the common issues encountered by business owners so you can recognize, prepare and bounce back. Common issues include:
- Capital – Small businesses are having a tough time making payroll and maintaining inventory. In addition to the Economic Injury Disaster Loan, the SBA offers capital access resources.
- Marketing – Keep your customers updated with the status of your business and protective measures you’ve taken to keep them and your staff safe.
- Inventory discrepancy – There are shortfalls and interruptions in the supply chain, be sure to have enough inventory on hand to keep things running as close to normal and expand your distributor sources so you are not relying on one supplier.
- Insurance – Do not procrastinate speaking to your insurance agent to review your policy.
SBA Economic Injury Disaster Loan
At the forefront of their relief effort is the Economic Injury Disaster Loan, which is designed to provide resources that resolve, minimize or slow the effects that COVID-19 has taken on small businesses. The SBA has identified common issues for business owners to prepare for and additional resources available to help bridge the gap.
The COVID-19 Economic Injury Disaster Loan was established by the SBA to aid business owners, private non-profits, homeowners and renters. This loan, with an interest rate of 3.75% (the average small business loan rate is 4%-6%), aims to offset the loss of revenue that many businesses are experiencing due to COVID-19 by providing loans up to $2 million.
It should be noted that in order to qualify for this loan, you must not have any other sources of credit available. Currently, all U.S. states and territories are eligible to receive funding. You can find the application for the Economic Injury Disaster Loan here.
The SBA has made other programs available in response to COVID-19. Among the additional resources is the SBA Debt Relief, Disaster Loan Advance, SBA Express Bridge Loans, and Paycheck Protection Program. Here are some details on these programs:
- SBA Debt Relief – provides debt relief for small businesses and pays the principal and interest of new 7(a) loans issued prior to September 27, 2020. The SBA also pays the principal and interest of current 7(a) loans for a period of 6 months.
- Economic Injury Disaster Loan Advance – This is an extension of the Economic Injury Disaster Loan but provides an advance of up to $10,000.
- SBA Express Bridge Loan – This program is for businesses who already have a relationship with an SBA Express Lender and provides loans for up to $25,000. This is a great program if you are in urgent need of cash.
- Paycheck Protection Program – Small businesses are eligible to receive funding to put towards job retention if they also meet program size standards. If you qualify, you can receive up to $10 million and your loan payments will be deferred for 6 months.
These programs are offered on a national level, but you can always reach out for local assistance and the SBA will match you with local partners. Be sure to take advantage of disaster loans and resources the Small Business Administration is making available so you can effectively navigate through common issues and set your business up for success.