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COVID-19 Small Business Loans and Other Resources

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This article was written by  Texas Legal Services Center and applies only to COVID-19 related SBA loans. For the most updated information, please review the Office of the Texas Governor's FAQs for Texas Businesses.

What is a Small Business Administration Economic Injury Disaster Loan (SBA EIDL)?

Small Business Administration (SBA) loans are small-business loans guaranteed by the SBA and issued by participating lenders, primarily banks. SBA loans rates and terms typically better for borrowers than other types of financing.

As a result of COVID-19 the government is offering statewide SBA Economic Injury Disaster Loans (SBA EIDL). These are low-interest loans for small businesses, most private non-private organizations, and small agricultural cooperatives suffering substantial economic injury due to COVID-19.

How does an SBA EIDL work?

EIDL Loans are available to small businesses who have been in operation since January 31, 2020. An EIDL is available even if you can secure credit elsewhere. An  EIDL can be used to pay fixed debts, payroll, accounts payable, and other bills that the business cannot pay due to COVID-19. The loans are available in a maximum abount of $2 million. The interest rate is 3.75% for small businesses and 2.75% for non-profits with terms up to 30 years. Loans over $200,000 must be guaranteed by any owner having a 20% or greater interest in the business. An applicant may request an expedited disbursement paid withing 3 days of the request.

 

Can I apply for loans under other programs and still qualify for an EIDL?

Yes. An applicant can apply and receive loans from various programs as long as you are using the funds from the loans for different things. There cannot be any double-dipping.

How do I apply for an SBA EIDL?

The fastest way to apply and receive a decision about eligibility on an SBA EIDL is online at SBA’s website. If you have any questions, contact U.S. SBA at 1-800-659-2955. You can also email disastercustomerservice@sba.gov.

What is the Paycheck Protection Program (PPP)?

The Paycheck Protection Program is a program that makes loans of up to $10 million available to certain qualified small businesses. A loan under this program is 100% federally guaranteed and fully forgiven if the funds are used for payroll costs (at least 75% of the loan must be used for payroll), interest on mortgages, rent, and utilities. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Review this FAQ on Paycheck Protection Program Loans.

Texas Riogrande Legal Aid drafted an article on COVID-19: SBA Paycheck Protection Program. To access this information click here.

For information on the Paycheck Protection Program, including: loan information, who can apply, loan details and forgiveness, and lender forms and guidance click here.

What is a SBA Express Bridge Loan?

A SBA Express Bridge Loan allows a small bsuiness who currently has a business relationship with an SBA Express Lender to access up to $25,000 quickly. An SBA Express Bridge Loan can be a term loan or used to bridge the gap while applying for a direct EIDL or other loans.

For more information on SBA Express Bridge Loans and how to apply, please click here.
 

What are my SBA Debt Relief options?

The SBA is providing debt relief assistance to small businesses during this pandemic. For more information on debt relief assistance, please click here.

Where else can I apply for financial assistance for my business?

Community Development Financial Institutions (CDFIs) is another resource that might be able to assist you financially. CDFIs are specialized community based financial institutions that provide financial assistance primarily in low income communities. You can use this CDFI locator to search for CDFI offices in Texas.

There may also be local and regional resources available in your area. You will need to check with your local banks and other economic development organizations for resources. Below is a list of cities in Texas and available resources in the area.

Austin

Dallas/Ft Worth

Houston

Rio Grande Valley

San Antonio

Is there any other information that could help maintain my business during this crisis?