RALEIGH – The U.S. Small Business Administration is now offering low-interest federal disaster loans for working capital to North Carolina small businesses suffering substantial economic injury as a result of the virus.

Patrick Rodriguez, SBA senior area manager, recently held an online webinar providing a high-level overview of the SBA disaster loan program. Here are some answers to the questions that you may have:

What kinds of small businesses can apply?​

SBA’s Economic Injury Disaster Loans (or working capital loans) are available to small businesses, small agricultural cooperatives, small aquaculture businesses and most private non-profit organizations

This includes:

  • Businesses directly affected by the disaster
  • Businesses that offer services directly related to the businesses in the declaration
  • Other businesses indirectly related to the industry that are likely to be harmed by losses in their community (Example: Manufacturer of widgets may be eligible as well as the wholesaler and retailer of the product.)
What is the criteria for loan approval?
  • Credit History: Applicants must have a credit history acceptable to SBA. No minimum credit score, SBA is looking at applications on a case-by-case basis. The SBA Disaster Loan is primarily a pre-crisis cash flow loan.
  • Repayment: SBA must determine that the applicant business has the ability to repay the SBA loan.
  • Eligibility: The applicant business must be physically located in a declared county and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons.
How much can people borrow?
  • Eligible entities may qualify for loans up to $2 million.
  • The interest rates for this disaster are 3.75 percent for small businesses and 2.75 percent for nonprofit organizations with terms up to 30 years.
  • Eligibility for these working capital loans are based on the size (must be a small business) and type of business and its financial resources.
How can they use the funds?

These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred.  The loans are not intended to replace lost sales or profits or for expansion.

What are the collateral requirements?
  • Economic Injury Disaster Loans under $25,000 do not require collateral.
  • SBA takes real estate as collateral when it is available.
  • SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available.
What other criteria is involved?

The applicant business must have a physical presence in the declared disaster area. An applicant’s economic presence alone in a declared area does not meet this requirement. The physical presence must be tangible and significant.  Merely having a P.O. Box in the disaster area would not qualify as a physical presence.

How are SBA working loans different to other SBA loans?
  • SBA’s Economic Injury Disaster Loan (EIDLs) funds come directly from the U.S. Treasury.
  • Applicants do not go through a bank to apply.  Instead apply directly to SBA’s Disaster Assistance Program.
  • There is no cost to apply.
  • There is no obligation to take the loan if offered.
  • The maximum unsecured loan amount is $25,000.
  • The first payment due date is five months from the date of the Note. (extensions are allowed depending on the nature of the business and general economic conditions).
  • Applicants can have an existing SBA Disaster Loan and still qualify for an EIDL for this disaster, but the loans cannot be consolidated. Existing holders of SBA 7a and 504 loans can also apply for SBA Disaster assistance (disaster loan amount will not count toward normal SBA loan limits).
How can people apply?
  • Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website.
  • Paper loan applications can be downloaded from www.sba.gov/disaster.  Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX  76155.
  • Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955, (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov.
For Help Filling out the SBA Disaster Loan Application

The following SBA-backed organizations provide assistance to small businesses in the state of North Carolina; email and phone counseling are available.

Women’s Business Centers:

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