The current global pandemic has left us with a sense of anxiety, and general helplessness. Due to the current economic climate, many small businesses find themselves unable to keep the doors open without an influx of funds to maintain operations. When small businesses struggle, the financial impact threatens the entire country. These businesses should know that financial help is available if they are struggling to meet obligations.
If a lack of cash flow traps small businesses, there is help available to borrow during this health crisis.
If your company is in hardship and need fast funding, the Small Business Administration can guarantee loans offered through the 7(a) loan-guarantee program. The government has also signaled billions of dollars in loans for businesses that are negatively affected by COVID-19. A guide supplied by the SBA illustrates the process of applying for a loan through the Disaster Loan program.
SBA’s Economic Injury Disaster Loans
The SBA plans to offer low-interest federal disaster loans for eligible small businesses and non-profits reeling from the financial impact of COVID-19.
The program is being currently under development. Companies can learn whether they are eligible and how to apply by calling the customer service number (1-800-659-2955)
A few key details of the disaster loans:
- Qualified businesses can apply for a $10,000 grant that can be received three days after applying. More details here: https://covid19relief.sba.gov/#/
- The disaster loans may pay fixed debts, payroll, accounts payable, and other bills impacted by COVID-19.
- Businesses can receive a 3.75 interest rate and nonprofits a 2.75% interest rate.
Small business loans are how companies typically fund expansion, inventory, and equipment. However, they can serve as a means to create a rainy-day fund from which to draw on when times are lean.
There are other means to finance short-term obligations to weather the storm of a cash crunch. You may use alternative capital sources by securing a business line of credit, zero-interest credit cards, crowdsourcing, or venture capital.
Small businesses make up 99% of all independent private enterprise in the United States. They play a vital role in keeping the economy on track. The current unexpected events withstanding, know that there is help available to get companies back into shape.