by Anthony Marchese
On March 6th, 2020, the President signed H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act into law. The bill provided an $8.3 billion package to different levels of government and for direct assistance for affected small businesses to respond to the coronavirus. Critically, the bill provided $1 billion in loan subsidies to be made available to help small businesses, small agricultural cooperatives, small aquaculture producers, and non-profit organizations which have been impacted by financial losses as a result of the coronavirus outbreak.
On March 18th, 2020, the U.S. Small Business Administration announced a disaster declaration for D.C. and the surrounding areas. This declaration makes SBA assistance available in the District of Columbia; all counties in Maryland; and in Alexandria (City), Accomack County, Loudoun County, Arlington County and Fairfax County in Virginia.
This allows for businesses in these areas to apply for Economic Injury Disaster Loans. These loans provide vital economic assistance to small businesses to help overcome a temporary loss of revenue. Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises financially impacted as a direct result of COVID-19 since January 31, 2020, may qualify for up to $2 million to help meet financial obligations and operating expenses, which could have been met had the disaster not occurred. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster.
The interest rate is 3.75 percent for small businesses, and 2.75% for private non-profit organizations. The SBA offers loans with long-term repayments to keep payments affordable – up to a maximum of 30 years and are available to entities without the ability to offset the adverse impact without hardship.
Loan Conditions & Eligibility Requirements: Applicants must have a credit history acceptable to SBA and applicants must show the ability to repay the loan. Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available. Economic injury disaster loans cannot be used to refinance long term debts.
Applicants may apply online and receive additional disaster assistance information at https://disasterloan.sba.gov/ela. Paper-based application materials may be downloaded for printing at https://disasterloan.sba.gov/ela/Information/PaperForms. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for help in completing the application process. Individuals who are deaf or hard‑of‑hearing may call (800) 877-8339.
Completed paper-based application packets should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
The deadline to apply for an Economic Injury Disaster Loan in D.C.; all counties in Maryland; and Alexandria (City), Accomack County, Loudoun County, Arlington County and Fairfax County in Virginia is December 21, 2020.
O’Riordan Bethel is a D.C. based law firm and SBA-certified government contractor. We support businesses in SBA certification matters, applications for assistance, and when necessary appeals of SBA determinations; and we provide direct mission support to federal agencies. We will be closely tracking the implementation of this newly available assistance available from the SBA. If you have questions, please feel free to contact us; we are operating in full telework mode and are open to receive email and phone communications.
