Legal Alert - March 27, 2020: Information and Guidance on Economic Injury Disaster Loans as a Result of the COVID-19 Pandemic
The U.S. Small Business Administration (the "SBA") is providing assistance to small businesses affected as a result of COVID-19.Pursuant to the SBA Disaster Declaration # 16349; NEW JERSEY Disaster Number NJ-00057 Declaration of Economic Injury, issued on March 18, 2020, the Economic Injury Disaster Loans ("EIDL") program was made available to small businesses across the entire state of New Jersey. The EIDL application deadline is December 18, 2020.
The U.S. Small Business Administration (the "SBA") has set aside $50 billion in low-interest EIDL for "on-going" small businesses affected by COVID-19. A small business may apply for up to $2 million per loan with a maximum interest rate of 3.75 %. The interest rate will be determined by a formula set by law and is fixed for the life of the loan.The maximum term of the loan is for thirty years.If your business is a non-profit the maximum interest rate is 2.75%.
The following is criteria that the SBA will consider when determining if the small business is eligible for the loan:
- Credit History;
- Ability to repay the loan; and
- Collateral (If the Small Business is requesting a loan over $25,000.00, collateral will be required.The SBA will take real estate as collateral when it is available.)
The EIDL may be used for the following:
- Fixed Debts;
- Accounts Payable;
- Other bills that cannot be paid due to the COVID-19's impact.
You can apply for the EIDL online at https://disasterloan.sba.gov/ela/ or by mailing your application to the SBA at the following address:
U.S. Small Business Administration
Processing and Disbursement Center
14925 Kingsport Rd.
Ft. Worth, TX 76155-2243
In addition to EIDL, there are other alternative lending options for small businesses to consider, including the following:
- Institutional Bank Loans;
- Regional Business Assistance Corporation ("RBAC") Loans; and
- New Jersey Economic Development Authority ("NJEDA") Loans.
For more information regarding relief available to small businesses contact the SBA's Customer Service Center at (800) 659-2955 or email firstname.lastname@example.org.
Our firm is able to assist you in connecting with the SBA, navigating through a bureaucracy that is likely to be swamped with countless applications.Please call our firm to assist you with all your business needs - (609) 927-1177.