(Updated March 24, 2020) FLB’s Corporate, Business and Banking group attorneys are here to support small businesses and nonprofits as they face challenges presented by the current COVID-19 (Coronavirus) outbreak.
The U.S. Small Business Administration (SBA) is partnering with designated states and territories to offer low-interest, long-term federal disaster loans for working capital to small businesses and nonprofits suffering substantial economic injury because of COVID-19 (Coronavirus). Pursuant to Pennsylvania Declaration 16360 (Disaster PA-00104), loans of up to $2 Million Dollars are available to small businesses in Pennsylvania, as well as select counties in Delaware, Maryland, New Jersey, New York, Ohio, and West Virginia. Applicants will need to meet the SBA’s credit requirements, establishing their ability to repay loans but for the current situation, acceptable credit history and the pledge of collateral to the extent available. The maximum interest rate for these loans of up to $2 Million Dollars is 3.75% for small businesses and 2.75 % for nonprofits. The maximum term for loans approved under this program is 30 years. These loans may be used for fixed debt, payroll, accounts payable, and other bills, but is not available for refinancing long-term debts. Eligibility for the program is need based.
In addition to disaster loans, the SBA is also working with existing borrowers under its 504 and 7(a) programs for loan payment deferments. SBA 7(a) borrowers may be eligible for deferments of up to 12 months, depending on whether the loan has been sold on the secondary market. And, SBA 504 borrowers may be eligible for deferments of 6 cumulative monthly payments or 20% of the original loan amount, whichever is less.
We continue to monitor the ever-changing situation. If you would like assistance in assessing your eligibility for this loan or assistance in applying, our attorney team is here to help. Please contact us using the form below, or give us a call at 610-797-9000. We wish you well during these extraordinary times.