Recently, the Small Business Administration (SBA) announced a new provision to the Economic Injury Disaster Loan (EIDL) which includes loan forgiveness on the first $10,000 advance to small businesses in need. Upon approval of the short, online application, $10,000 advances are reportedly being paid within 3-5 days business days.
The full rundown on the program is available here: EIDL Information
The application is available online (Loan Application) and requires certification that your business has suffered an economic loss; no further documentation is being required at this time. This is a direct loan from the treasury, not via private lenders. Later this week federally backed programs will be released allowing you to apply for emergency loans through your banking institution.
The EIDL applies to all small businesses, including landlords. Nonprofit 501 (c)-(e) are also entitled to apply. The funds are intended as working capital and can be used for payroll, accounts payable, and all other fixed and operating expenses, which will be forgiven.
While interest accrues from day 1 of the loan payout, the first $10,000 advance will not accrue interest and will be forgiven. Furthermore, no payments will come due during the first 12 months of the loan term. Thereafter, fixed principal and interest payments will be required, with up to 30 year fixed terms at a 3.75% fixed rate. Up to $25,000 loans will be granted without any collateral requirement. Loan applications in excess of $25,000 MAY require collateral.
Applying for an EIDL loan does not prevent you from applying to the loan and disaster relief programs that will be rolled out in the coming week(s).
The information on this page does not constitute legal advice and should not be relied upon as each situation is fact specific and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. The information on this page is solely for the purpose of legal education and is intended to only provide general information about the matters stated therein. The information on this page should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area of the matters stated therein. No attorney-client relationship is formed without an actual agreement confirmed in writing. We have attorneys licensed in Oregon, Washington, and Arizona.