The Small Business Administration (SBA) last week simplified the process for states seeking an economic injury declaration, the first step before the agency can offer low-interest, working capital loans to small businesses and nonprofits suffering economic harm due to the covid-19 epidemic.
Under the new criteria, states or territories are only required to certify that at least five small businesses throughout the state have suffered substantial economic injury, regardless of where they are located. Historically, the agency required states to prove that at least five small businesses have suffered substantial economic injury as a result of a disaster, with at least one business located in each declared county.
The updated criteria also authorize disaster assistance loans related to coronavirus to be offered statewide following an economic injury declaration. Disaster assistance loans typically are only offered to small businesses within counties identified as disaster areas by a governor.
A list of states that have already been designated as disaster areas can be found on SBA’s website. Lawmakers included the authority for the agency to provide economic injury disaster loans of up to $2 million as part of the $8.3 billion emergency spending bill President Trump signed March 6 to combat the coronavirus.
A significantly larger tranche of support for small businesses is on its way as congressional negotiators this weekend attempted to complete negotiations on a massive stimulus package to mitigate the devastating impact of the pandemic. The measure is expected to include a lending program providing as much as $300 billion for affected small businesses.