woman filling out paperwork
Through an online application, small businesses that are struggling financially in the wake of COVID-19 can apply for a low-interest relief loan from the SBA. — Getty Images/Sitthiphong

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Source: US Chamber of Commerce, Matthew D’Angelo, Contributor Guide to SBA Disaster Assistance Loans for Coronavirus

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 organization’s website and applying online.


Read U.S. Chamber of Commerce story on the federal government’s small business stimulus package.

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.

Read: How to apply for an SBA Disaster Assistance Loan

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.

Coronavirus Guide for Small Businesses

CO— is working to bring you the best resources and information to help you navigate this challenging time. Read on for our complete coronavirus coverage.

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.
  • Next steps: Stay in touch with your SBA loan representative at your local bank and SBA office.

For everything you need to know about applying for a small business loan, see the U.S. Chamber’s Small Business Loan Guide.

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:


Published March 26, 2020