
From the Federal Reserve lowering interest rates to a recent $2 trillion economic stimulus package, the government is getting involved in the economic fight against COVID-19. One area of particular importance and benefit to small businesses is the disaster assistance loan from the Small Business Administration.
On March 6, the Coronavirus Preparedness and Response Supplemental Appropriations Act was passed, providing $20 million for the SBA to leverage $7 billion in low-interest disaster assistance loans to small businesses. This means small businesses across the country are now eligible to receive disaster relief loans from the SBA.
With quick news developments and endless headlines relating to COVID symptoms, preparedness and small business relief, it’s important to understand what concrete steps you can take to alleviate the economic impact on your business.
If you feel overwhelmed by taking the first step to save your business, don’t be. All small businesses in the U.S. are eligible for an SBA loan. Taking the first step is as simple as visiting the SBA website and applying online.
For everything you need to know about applying for a small business loan, see the U.S. Chamber’s Small Business Loan Guide.
What is a disaster relief loan?
The disaster loan program from the SBA is in place to provide economic relief to businesses impacted by natural disasters throughout the United States. The program is used extensively after detrimental events where businesses can receive low-interest loans to get back on their feet.
Since early March, this offering has been extended to small businesses across the nation that have had significant losses due to the coronavirus pandemic. These loans have a 3.75% interest rate for small businesses and a 2.75% rate for nonprofits, and are usually capped at $2 million.
- How SBA disaster loans work: While you’ll be applying for a loan through the SBA, this loan program is a government-backed loan program. This means that while a normal bank will be providing you with a loan, the SBA will be guaranteeing that loan to the bank. It will cover the loss should your business be unable to pay back the loan to the bank. As you apply and learn more about the process, be prepared to work with other partners to find funding.
- Eligibility: Due to the breadth and scope of COVID-19’s impact on the American economy, all U.S. small businesses are eligible for a disaster relief loan from the SBA. You can apply online to get started.
Disaster loans can be used to cover many business expenses, like payroll, accounts payable, equipment and machinery purchases, real estate payments and other bills you cannot pay because of COVID-19.
Due to the breadth and scope of COVID-19’s impact on the American economy, all U.S. small businesses are eligible for a disaster relief loan from the SBA.


How can you get an SBA disaster loan?
- Where to start: Apply online by filling out the appropriate forms and providing your business’s information. Once you download the forms for your application, check off “economic injury” as your reason for filing. Then follow the instructions and fill in the necessary information. Once you re-upload your application, you can check the status of it at any time by visiting the website.
- What you need: Be prepared with some financial information and supporting documentation related to your business, like two to three years of tax returns, last year’s financial statements, a year-to-date financial statement, property leases, and a working knowledge of your business and personal credit score. A full list of supporting documentation can be found at the bottom of your application form.
- How long will it take: The average for SBA to issue a Disaster Loan decision is 21 days. Within that time frame, a loan specialist will be in contact with you to figure out the amount and parameters of the SBA disaster loan. Once the loan documents are signed, funds are deposited via ACH within 3 to 5 business days.
- To check on the status of your EDIL you can email the SBA at: DisasterCustomerService@sba.gov
Read: How to apply for an SBA Disaster Assistance Loan
Resources for disaster relief loans
With an influx of applications and visitors to the SBA site, it may be difficult to get in touch with an SBA loan representative. There are, however, some other resources you can use to learn more about the process and better understand your business’s situation.
- SCORE: This organization works in tandem with the SBA by providing mentors to small businesses. If you have a lot of questions during this time, it may be a good idea to get in touch with a SCORE mentor and analyze your options.
- SBDC: Small Business Development Centers are located throughout the U.S. and provide small businesses with resources to grow.
For more resources from the U.S. Chamber of Commerce:
- All of our coronavirus content in one place.
- COVID-19 Vaccine FAQs
- Reopening Guide and Resources
- Main Street Lending Program Guide
- Social Media Toolkit for Reopening for Reopening
- State-by-State Business Reopening Guide, with interactive map
- Paycheck Protection Loan Guide
- Economic Injury Disaster Loan Guide
- Guide to PPP Loan Forgiveness
- Employee Retention Tax Credit Guide
- Coronavirus Response Toolkit for Businesses
- Customizable flyer for businesses to communicate with customers
- Find your local Chamber of Commerce
- The U.S. Chamber of Commerce Foundation's list of small business resources for coronavirus assistance
- CARES Act Guide for Independent Contractors and 1099 Workers
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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