Small Business Loans amid the Coronavirus Crisis

Under the Coronavirus Preparedness and Response Supplemental Appropriations Act, which was signed on March 6, 2020, businesses injured by the coronavirus pandemic may be eligible for Economic Injury Disaster Loans funded by the Small Business Administration (“SBA”).[1]

Economic Injury Disaster Loans are designed to provide small businesses and private, non-profit organizations with low interest rate loans of up to $2 million. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; however businesses with credit available elsewhere are not eligible. The interest rate is 2.75% for non-profit organizations, with the same terms and restrictions. SBA offers loans with long-term repayments 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.[2]

According to the March 17, 2020 guidance, Economic Injury Disaster Loans will now be available to businesses in counties that have been declared a disaster by the SBA. This includes Dutchess, Putnam and Westchester counties in New York, Gloucester and Salem counties in New Jersey and several counties in Connecticut. The White House has tentatively allocated $50 billion to fund these loans in response to the coronavirus outbreak and has insisted the SBA implement processes to expedite the evaluation of applications.[3]

You can contact your local SBA loan office to initiate the application process. The application can also be completed online.[4]

New York City (the “City”), which has not yet been declared a disaster by SBA, will provide relief for small businesses across the City that have seen a reduction in revenue because of COVID-19. Businesses with fewer than 100 employees that have suffered sales decreases of 25% or more will be eligible for zero interest loans of up to $75,000 to help mitigate lost profits. The City is also offering small businesses and non-profit organizations with fewer than five employees a grant to cover 40% of payroll costs for two months (an average of $6,000) to help retain employees.[5] Additionally, to qualify for the NYC Employee Retention Grant Program, the small business or non-profit organization must (i) demonstrate at least a 25% decrease in revenue due to Covid-19, (ii) have been in operation for a minimum of six months and (i) have “no outstanding tax liens or legal judgements [sic]”.[6]


[1] Small Business Administration, Coronavirus (COVID-19): Small Business Guidance & Loan Resources,

[2] Small Business Administration, SBA Updates Criteria on States for Requesting Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19), Release Date March 17, 2020, Release Number 20-26,

[3] Id.

[4] For access to the online application, visit:

[5] NYC Small Business Services, Assistance & Guidance for Businesses Impacted Due to Novel Coronavirus,

[6] NYC Small Business Services, Financial Assistance for Businesses Impacted by COVID-19,

For more information on the topic discussed, contact:

03.20.2020  |  PUBLICATION: Other Publications  |  TOPICS: Bankruptcy

This Page