The U.S. Small Business Administration (“SBA”) administers an existing program whereby the SBA directly provides low-interest Economic Injury Disaster Loans (“EID Loans”) to small businesses that are affected by a natural disaster or other declared emergency. Under authority granted by the Families First Coronavirus Response Act which passed into law on March 18, 2020, the SBA may provide such loans to small businesses in states declared to be “affected” by the COVID-19 pandemic. As of March 26, 2020, businesses in many states (including New York and New Jersey) have been deemed eligible for EID Loans and several more states are in the process of applying (on behalf of such state’s businesses) for eligibility for the program. The Alert can be found here.
Please note that this alert addresses only the SBA’s Economic Injury Disaster Loan program, and does not address proposed changes to the SBA’s Section 7(a) Loan program under the currently-developing Coronavirus Aid, Relief, and Economic Security Act (commonly known as “CARES”). A separate GEABP update regarding CARES will be issued shortly.