If your business has been impacted by COVID-19, you may want to apply for an SBA Economic Disaster Loan. In our 12-minute video below, we’ll walk you through how to apply step by step.
But first, a little background information.
About SBA Disaster Loans
- They’re administered by the Small Business Administration (SBA)
- Businesses in all 50 states are eligible for an Economic Disaster Loan (as of the time of writing) due to the impact of the COVID-19 outbreak
- SBA Economic Disaster Loans have very favorable terms, with repayment windows of 10 years or more and a fixed interest rate of 3.75%
- These loans are separate from other financial assistance offered in the COVID-19 stimulus package
- You can apply even if you’re self-employed and don’t have any other employees
- The application includes a request for an additional $10,000 grant, which will not have to be paid back
How to Apply for an SBA Economic Disaster Loan [Video]
To apply for one of these loans, go to SBA.gov and click the link at the top: “Coronavirus (COVID-19): Apply for an Economic Injury Disaster Loan.”
You’ll be asked to enter information related to your business, including your gross revenues for the past 12 months (up to January 31, 2020), the cost of goods sold in that period, and more. You can estimate these figures, but be sure to save your answers because the SBA will ask you for supporting information later on.
Watch our step-by-step guide on how to apply for an SBA Economic Disaster Loan below.
On the third screen, you’ll see an option to check, “I would like to be considered for an advance of up to $10,000.” These are the additional grant funds that do not have to be repaid. If you check yes, you’ll also need to enter your bank account information so the SBA can direct deposit the funds into your account.
We fully expect the Small Business Administration to be flooded with applications, so it’s important to send in your application ASAP.
Other Relief Options for Businesses Impacted by COVID-19
There are 2 other relief options that small business owners need to know about, and you may be able to use these programs in addition to the SBA Economic Disaster Loan.
- Payroll Tax Credit: You may be eligible for the Payroll Tax Credit if you can show that your revenue has decreased by 50% or more due to COVID-19, or that your business was shut down by a government order.
- Payroll Protection Program: Under the new Keeping Americans Paid and Employed Act, you can apply for a low-interest loan from the Small Business Administration (separate from an Economic Disaster Loan). Most importantly, they will forgive any portion of the loan used for up to 8 weeks of payroll, rent, and other allowable expenses. This essentially free money that you won’t have to pay back.
Learn more about each option in the video below.
