The U.S. Small Business Administration announced on March 16th that they are offering low-interest federal disaster loans for working capital to California small businesses suffering substantial economic injury as a result of COVID-19. These loans provide vital economic assistance to help small businesses overcome the temporary loss of revenue they are experiencing.

The disaster declaration makes SBA assistance available in many California counties, including Orange County. Businesses, private non-profit organizations, agricultural cooperatives and aquaculture enterprises that have been financially impacted as a direct result of COVID-19 may qualify for loans of up to $2 million. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Applicants can apply in three easy steps:

  1. Application:
    • Apply online, in person or via mail by December 16, 2020.
    • As a small business, you may apply for a maximum loan of $2 million.
  2. Verification & Approval :
    • SBA reviews your credit before conducting an inspection to verify losses.
    • A loan officer will determine your eligibility during processing, after reviewing any insurance or other recoveries. SBA can makea loan while your insurance recovery is pending.
    • Their goal is to arrive at a decision on each application within 2 – 3 weeks.
  3. Loan closed & funds dispersed:
    • SBA will prepare and send loan closing documents to you for signature.
    • Once the signed loan closing documents are received, an initial disbursement of $25,000 will be made within 5 days.
    • A case manager will be assigned to work with you to help you meet all loan conditions and schedule subsequent disbursements until the full loan amount is received.
Eligibility for Economic Injury Disaster Loans is based on the financial impact of COVID-19. The loans are intended to help businesses meet financial obligations and operating expenses which could have been met had the disaster not occurred.

The interest rate is 3.75 percent for small businesses and 2.75 percent for private non-profit organizations. SBA offers loans with long-term repayments, up to a maximum of 30 years, in order to make payments more affordable.

Applicants may review disaster assistance information and apply online at https://disasterloan.sba.gov/ela. The deadline to apply for an Economic Injury Disaster Loan is Dec. 16, 2020. Interested applicants may call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information.