SBA Disaster Assistance Loans for Small Business

Jul 19, 2021



On March 12th, 2020, the President directed the U.S. Small Business Administration to begin offering designated low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

Upon a request received from a state’s Governor, the SBA will issue an Economic Injury Disaster Loan declaration under its authority. Governor Polis made this request formally on March 17th.

It was just announced that the state has been approved throughout all 64 Colorado counties.

From what information is available, Economic Injury Disaster Loans (EIDLs) can provide working capital loans to help small businesses and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met due to the disaster.

These loans are intended to assist through the disaster recovery period.

Credit Requirements:

  • Credit History – Applicants must have a credit history acceptable to SBA.
  • Repayment – Applicants must show the ability to repay the loan.
  • Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge available collateral.

Interest Rates: The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 4 percent.

Loan Terms: The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term.

Loan Amount Limit: The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance, and other recoveries up to the administrative lending limit. SBA also considers potential contributions available from the business or its owner(s) or affiliates. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.

Unlike other SBA loan programs where a manufacturer must go through an SBA-approved lending institution, this disaster assistance loan is a direct lending program from SBA’s Disaster Division. Once the entire state is listed, a company can visit: to start the loan process.

Additionally, the National Small Business Development Center (SBDC) network is training SBDC personnel to help businesses apply for the loans. A manufacturer can find an SBDC office near them by visiting the state office at

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