With sporting events, concerts, public events, and now even sit-down service at most restaurants and bars and small gatherings being canceled with no definite end in sight, many small and medium sized businesses are already feeling the impact of the Coronavirus (“COVID-19”). Most small business owners are fighting a battle on many fronts, from the balancing act of keeping employees and customers safe and keeping the doors open to the mounting financial strain due to the dramatic drop, and in some cases the complete stoppage, of business. While this will inevitably be a battle that business owners will be waging for some time, assistance to small business owners has already commenced.
The U.S. Small Business Administration (“SBA”) has begun offering small businesses suffering substantial economic injury as a result of COVID-19 assistance in the form of Economic Injury Disaster Loans (“EIDLs”) which are low-interest federal disaster loans to qualifying businesses for working capital in certain designated states and territories. On March 17, 2020 Texas Governor Greg Abbot requested an Economic Injury Disaster Declaration from the SBA in order for Texas businesses to access the EIDL program and announced:
At a time when small businesses are hurting from the economic impact of COVID-19, the State of Texas is committed to helping these businesses receive the financial relief they need to continue operating. That is why today [March 17, 2020], I requested that the U.S. Small Business Administration implement a declaration to provide SBA Economic Injury Disaster Loans for the entire state of Texas.
With Governor Abbot’s request, the SBA will now issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act recently signed by President Donald J. Trump, an Economic Injury Disaster Loan assistance declaration. Once said Economic Injury Disaster Loan assistance declaration is issued by the SBA for Texas, the SBA will then be able to make loans available to small businesses and private, non-profit organizations throughout Texas to help alleviate economic injury caused by COVID-19.
The SBA’s EIDLs offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are currently experiencing. These loans may be used to pay accounts payable, payroll, fixed debts, and other expenses that cannot be paid because of COVID-19’s impact. The interest rate for these loans is 3.75% for small businesses and 2.75% for non-profit organizations. If granted, these loans offer long-term repayment schedules in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. It is important to note, however, that businesses and non-profit organizations with credit available elsewhere are not eligible for EIDLs.
All Texas small businesses who believe they may be eligible for an EIDL from the SBA should visit the Texas Division of Emergency Management (TDEM) https://tdem.texas.gov/covid-19/ Once at the website, business owners will click the “SBA Loan Info” tab which will direct them to the SBA’s website where they can apply for assistance. For additional information, business owners can contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail [email protected]
The Strong Firm P.C., has always committed to staying ahead of the technology curve allowing our attorneys and support staff to be able to serve clients’ ever changing needs even in times of local emergencies such as Hurricane Harvey and Tropical Storm Imelda and now in the face of a national emergency, COVID-19. While we are still open for business serving the needs of our clients as usual, should the CDC or local authorities require a complete office shut down, we have the ability to instantly switch over and operate remotely at full capacity with no interruption of service to our clients. As a firm, we are committed to our families, friends, clients, and community to remain Strong during this most recent challenge, but as every previous challenge faced by our community has proven, together we will weather this storm as well.
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