Many Texas small businesses are already feeling the impact from the spread of COVID-19, the disease caused by the new coronavirus, and its disruption of the American way of life. Today, small businesses statewide are eligible to apply for U.S. Small Business Administration Economic Injury Disaster Loans. We are processing applications as soon as possible and some are even processed as fast as within a few days.
The Texas Governor’s Office and the SBA Disaster Office teamed up to rapidly make this recovery funding available to help minimize any economic disruption to Texas’s 2.7 million small businesses, who employ 4.7 million people across the state.
The SBA joins the whole of government response and stands beside Texas’s entrepreneurs ready to help guide them through this unprecedented chapter in our country’s history.
I’m grateful to work under Administrator Jovita Carranza who understands the challenges small businesses are facing right now. To get money to small businesses across the nation sooner, she revised the criteria for states seeking an economic injury declaration related to the new coronavirus.
Her bold move to relax the criteria had two immediate impacts:
1. Faster, easier qualification process for states seeking SBA disaster assistance. Historically, the SBA has required that any state or territory impacted by disaster certify at least five small businesses have suffered substantial economic injury as a result of a disaster, with at least one business located in each declared county. Under the revised criteria, states or territories are only required to certify that at least five small businesses have suffered substantial economic injury, regardless of where those businesses are located.
2. Expanded, statewide access to SBA disaster assistance loans for small businesses. SBA disaster assistance loans are typically only available to small businesses within counties identified as disaster areas by a governor. Under the revised criteria, disaster loans will be available statewide following an economic injury declaration. This will apply to current and future disaster assistance declarations related to the new coronavirus.
The interest rate on EIDL loans is 3.75% for small businesses and 2.75% for private nonprofit organizations with terms up to 30 years. Loan amounts and terms are set by SBA and are based on each applicant’s financial condition.
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. It’s important to note that for the first $25,000 no collateral is required. Over $25,000 you may be required to pledge available collateral.
The SBA launched www.sba.gov/coronavirus to provide information about additional resources small businesses can access now. This includes financing through SBA Loan Guarantee Program — working capital, microloans, express loans and lines of credit — and counseling services through the SBA’s Resource Partner Network to help businesses navigate preparedness plans.
SBA is the tip of the spear in this administrations effort to combat and minimize any economic disruption to Texas’s small businesses impacted by the coronavirus pandemic.
We will get through this together and SBA will be there providing resources and support every step of the way.
Justin Crossie is the regional administrator of the U.S. Small Business Administration’s South Central Region VI, serving, Louisiana, Arkansas, Texas, Oklahoma and New Mexico.