Clyde Snow

US Small Business Administration Disaster Loan Assistance for COVID-19

by | Mar 19, 2020

The US Small Business Administration recently created a list of states and counties eligible for small business disaster assistance loans related to the COVID-19 outbreak. These loans offer “up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue” and “may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.”[1] “The interest rate for a small business is 3.75% and the interest rate for non-profits is 2.75%” with “long-term repayment [options]. . . up to a maximum of 30 years . . . based on each borrower’s ability to pay.”[2]

Currently, areas eligible for COVID-19 SBA Disaster Loans include the following States: California, Connecticut, the District of Columbia, Maine, Montana, Nevada, New Mexico, Rhode Island, Utah, and Washington.[3] Certain counties in Oregon, Idaho, Wyoming, Colorado, Arizona, Massachusetts, Texas, North Dakota, New Hampshire, Virginia, Maryland, and New York are also eligible.[4] Businesses should check the SBA’s Coronavirus Disaster Assistance page to determine which SBA area office can assist with their applications and for updated approved areas.[5]

To apply, businesses must provide the following:

  • A completed business loan application;
  • IRS Form 4506-T completed and signed by the applicant business, each principal owning 20% or more, each general partner or managing member, and for any owner who has more than a 50% ownership in affiliate business (including business parent, subsidiaries, and/or businesses with common ownership or management);·        
  • Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business (or an explanation if not available)
  • A Personal Finance Statement (SBA Form 413), completed signed and dated by the applicant (if a sole proprietorship, each principal owning 20% or more of the applicant business, each general partner or managing member; and
  • A Schedule of Liabilities listing all fixed debts (SBA Form 2202).[6]

    Upon receipt of the application, the SBA will review the applicant’s credit, estimate the total loss suffered by the business, and determine the applicant’s eligibility.[7] The SBA strives to reach a final decision on the loan within two to three weeks, but the applicant may receive an initial loan disbursement within 5 days of receipt of the signed loan closing documents, including up to $25,000 for working capital.[8]

    Marla Trollan, the director of the Utah District Office explained to KSL News that “[a]s long as [a business] can demonstrate that there is a resolved loss of revenue and economic injury as a result of the virus, they can basically submit an application for [a] disaster loan to the SBA.”[9]

    Businesses may apply online, and if doing so for assistance related to COVID-19, should select only Economic Injury on their application. Applications may be submitted at the following link: https://disasterloan.sba.gov/ela/Account/Login.

    Business should check the SBA’s Coronavirus Disaster Assistance page to determine which SBA area office can assist them with their application at https://www.sba.gov/disaster-assistance/coronavirus-covid-19. Please contact our office if you have any additional questions or concerns related to the operation of your business obligations and/or benefits that may be available to you during this unprecedented time.


    [1] U.S. SBA Disaster Assistance: Coronavirus (COVID-19), SBA Disaster Assistance in Response to the Coronavirus (2020), https://www.sba.gov/disaster-assistance/coronavirus-covid-19.
    [2] Id.
    [3] Id.
    [4] Id.
    [5] Id.
    [6] U.S. SBA: Three Step Process: Disaster Loans (Aug. 2020), https://www.sba.gov/sites/default/files/resource_files/Disaster_Playbook_One-Pager_8.1.18_logo_V1_.pdf.
    [7] Id.
    [8] Id.
    [9] Jason Lee, Utah small businesses fighting to survive statewide coronavirus shutdown, KSL (Mar. 17, 2020, 8:51 PM), https://www.ksl.com/article/46731481/utah-small-businesses-fighting-to-survive-statewide-coronavirus-shutdown.

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