Clarity on the Small Business Association Disaster-Relief Loan Program

This article was updated on March 20, 2020.  Updates to this article will be made as new information becomes available.

Clarity on the Small Business Association Disaster-Relief Loan Program

Schneider Downs continues to track the evolving landscape of financial programs offered to small businesses disrupted by the coronavirus (COVID-19). 


The U.S. Small Business Administration (“SBA”) is offering loans through additional funding provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act recently signed by President Donald Trump.

Upon a request received from a state’s Governor, SBA will issue an Economic Injury Disaster Loan declaration.  Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state to help alleviate economic injury caused by the Coronavirus (COVID-19).

It is anticipated that all states and counties will be eligible for the program.  As of this writing, state’s Governors are in the process of applying for access to the program; however, not all states, or counties within the states, are currently eligible.  If a specific state/county is not currently eligible, continue to monitor the website for declarations of eligibility.

Application Process for SBA Disaster Loans

The Economic Injury Disaster Loan assistance declaration will make Disaster Loans of up to $2 million available to small businesses, targeting food service and manufacturing, along with private, nonprofit organizations in states that are approved for the program.

The SBA Disaster Loans are designed to help businesses without available credit with working capital needs and focusing on recurring monthly expenses such as payroll.  Businesses with credit available elsewhere are not eligible for this program.

Disaster Loans are provided directly from the SBA.   By lending directly to small businesses, the SBA is able to provide lower interest rate loans than banks.  The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.  Business collateral of $25K or greater is used to back the Disaster Loan.   

Decisions on loans are made on a case-by-case basis and are determined by revenue lost due to the coronavirus and ability to repay the loan.  The loan is intended to be used to help businesses to get back to where they were before the disaster and not for improvement or expansion.  Proof of need for the loan is determined by the SBA Disaster Loan officer after the application is submitted.  Selection for the loan is on a first come, first serve basis. It is recommended by the SBA that applications be submitted as quickly as possible.

There are guidelines specifying if a business is qualified as a small business to apply for an SBA loan.  Small business qualification varies by industry NAICS codes, and is determined by revenue or number of employees.

For help in determining your small business industry NAICS code, please visit:

A business can determine if they qualify as a small business using their NAICS code by visiting

Information needed to apply for a SBA Disaster Loan is similar to applying for a bank loan. Documentation includes:

  • Income Statement (i.e., business and/or personal income)
  • Balance Sheet
    • schedule of assets (cash, property, etc.)
    • schedule of liabilities/debts (mortgages, loans, etc.)
  • A tax release form is required for the IRS to send the SBA federal income tax information, as there is a three-year look back period for taxes of all equity owners of the business. 

To apply for a SBA Disaster Loan, please visit,

SBA anticipates the timeframe from application receipt, approval and loan disbursement to be approximately 30 days.  Timing and amount of recurring distributions will be determined with the Disaster Loan officer.

If you have questions regarding the SBA Disaster Loan program or how we can help you navigate the application process, please reach out to Michael Hart with Schneider Downs Meridian at 216-543-0821.

Additional Resources regarding SBA Disaster Loans

For information concerning the SBA’s response to the coronavirus, please visit

To locate a U.S. SBA district office near you, please search at

For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail [email protected]

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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

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