March 17, 2020
By Ajay Singh, Partner
While the federal government is still working on an overall bill to address the Coronavirus pandemic in the US, there are emergency loans which your business may be able to avail itself of during this difficult time.
- The SBA has Economic Injury Disaster Loans which provide small businesses with working capital loans of up to $2M that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans are designed to provide working capital to small businesses who are suffering substantial economic injury as a result of COVID-19.
- The loan proceeds can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid due to the disaster’s impact.
- The interest rate on these loans is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profit businesses is 2.75%.
- The following link provides further detailed information regarding the SBA’s disaster loan program as well as other information which is relevant to small businesses during the COVID-19 pandemic: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
- Governor DeSantis announced on Monday, March 16, 2020, that the Florida Small Business Emergency Bridge Loan Program which is managed by the Florida Department of Economic Opportunity would be activated.
- There will be up to $50M allocated for this program.
- Small business owners with two to 100 employees whose business is located in Florida and who are affected by COVID-19 can apply for short term loans of up to $50,000.
- The loans are interest-free for the loan term and are designed to bridge the gap to either federal SBA loans or commercially available loans. The interest rate is 12% per annum on the unpaid balance after the loan term until the loan is repaid in full. The term for each loan is 1 year.
- To be eligible to apply for these loans, the business must have been established prior to March 9, 2020 and must be able to demonstrate economic impacts as a result of COVID-19. Applications will be accepted through May 8, 2020, contingent on the availability of funds.
- In addition, the Florida Department of Economic Opportunity is currently surveying businesses throughout the State who have been impacted by COVID-19. This survey can be accessed HERE.
- For additional information regarding the Florida Small Business Emergency Bridge Loan Program please visit: https://floridadisasterloan.org/
We at Hunter Business Law stand ready to assist you in any manner needed for applying for these loan programs. Please contact us with any questions or concerns. We will continue to provide additional information related to these loan programs as well as others which are made available by Federal, State, and local governments.
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