How To Apply For a Coronavirus Small Business Loan

May 07, 2020

The SBA offers low-interest Coronavirus Small Business Loans through their disaster loan program.

The American economy continues to suffer the devastating effects of the COVID-19 health crisis, with small businesses bearing the brunt of the blow. As lives continue to be disrupted via social distancing and lockdowns nationwide, small businesses such as restaurants and retail are having to temporarily shut down due to “supply chain failures”, reduced or eliminated traffic, which also means an interruption of cash flow. 

Thankfully, the U.S. Small Business Administration or SBA has historically provided fully federally-funded Economic Injury Disaster Loans (EIDL) to all businesses that have been directly impacted by natural disasters or other related emergencies. 

Jovita Carranza, SBA chief, announced that the SBA will “will work directly with state Governors to provide targeted, low-interest disaster recovery loans to small businesses that have been severely impacted by the situation.”

Who Is Eligible To Apply For a Coronavirus Small Business Loan?

This loan was developed to serve small businesses and small agricultural cooperatives who have experienced significant economic loss due to the Coronavirus pandemic. One important requirement to qualify for this loan is that these aforementioned businesses must be unable to receive alternative funding. However, businesses are not allowed to apply for these loans independently, instead, local county and state officials must work with the SBA to make a declaration of disaster for their area. Only after this occurs can businesses apply for this type of loan. 

How To Apply For The Coronavirus Small Business Loan

Here are the steps to applying for the Coronavirus Small Business Loan:

  1. Apply For a Loan: You have three options for applying for this loan: a) online using the website disasterloan.sba.gov/ela, b.) in-person at a disaster center (although this option is currently unavailable given the circumstances), c.) by mail.
  2. Property Is Verified and Loan Decision Is Made: The SBA will review your existing credit before they begin an inspection to validate your losses. An SBA verifier will be assigned to provide an estimate of the total physical loss to your  “disaster-damaged” property. After reviewing any insurance or recoveries, a loan officer will determine your eligibility. The SBA can still issue you a loan even though your insurance recovery is pending. The loan officer will work closely with you to gather all the necessary information needed to reach a decision. The SBA’s goal is to reach this decision between 2-3 weeks. The loan officer will be in contact to talk about the loan recommendation and what to do next. You will receive the loan decision in writing.
  3. Loan Is Closed And Funds Disbursed: Once the decision has been made, the SBA will send you the Loan Closing Documents to get your signature. As soon as they receive the signed Loan Closing Documents, the first disbursement will be issued to you within 5 days. For Physical Damage, the funds will be $25,000. For Economic Injury, it will be $25,000 (as well as the Physical Damage disbursement). 

You will be assigned a loan officer to assist you to meet all your loan conditions. They will also work with you to schedule the remaining disbursements until you receive the full amount. 

Stay Informed

Some government organizations do take some time to update their websites to reflect the latest developments on the pandemic crisis and how it affects its loan offerings. However, continue to visit the SBA website often for any changes and/ or see what other loan programs will best suit your business.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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