The Small Business Administration (SBA) has an Economic Injury Disaster Loan program. It offers loans to help small businesses make it through economic crises, such as the one currently being caused by COVID-19. Although an SBA Coronavirus loan may sound enticing, many business owners may not qualify for these government programs.
More Small Businesses Seeking Temporary Funding
As the United States looks headed into a recession because of COVID-19, the country’s 30 million small businesses are increasingly turning to short-term financing programs. These services can help the nation’s small businesses survive and emerge stronger from the recession.
In particular, small businesses will need loans to cover cash-flow needs during the economic crisis. A loan can cover a wide variety of expenses during difficult times, including employee salaries, rent, utilities, commercial vehicle expenses, and accounts payable.
A small business can navigate through the economic downturn without failing to meet any of its financial responsibilities. And while SBA Coronavirus loans are probably the best option for small business owners, you need to make sure you can apply for one.
Details of the SBA’s Loan Program
Thanks to the funds provided by the CARES Act, the government is able to offer several funding programs. The most important ones are the EIDL and the PPP (not available for now).
Economic Injury Disaster Loans (EIDL)
This is an emergency disaster loan program. Its funds ($10 billion total) are being deployed directly by the SBA. It ends on December 31, 2020.
You’ll need to meet various criteria to qualify for the EIDL program:
- You’ll need to have been in business since January 31, 2020.
- Your small business must have 500 or fewer employees.
- The SBA has extended the EIDL program to include independent contractors and freelancers.
- Also eligible for an SBA COVID-19 loan are sole proprietorships, small tribal businesses, private non-profit groups, and agricultural enterprises.
- The SBA is not restricting its emergency loans to just US citizens. Green card holders can qualify.
- Since the “Business Owner Information” section in the application asks for an SSN, small business owners who aren’t legal permanent residents may use an ITIN instead of an SSN.
Paycheck Protection Program (PPP)
This program issued $521 billion in Coronavirus relief loans, primarily, via banks, credit unions, and other SBA certified lenders. However, this program stopped taking applications on August 8, and it’s still uncertain if Congress will agree to extend it.
If you want to learn more about the CARES Act programs, read our article: COVID-19 small business Relief Programs.
The EIDL: Does it Has Any Downsides?
While this Business Relief program is your best option (and we wholeheartedly recommend you to apply for one), many business owners might not be able to apply for one, or won’t have their application accepted because the SBA Coronavirus loan program has stringent requirements.
If you don’t qualify, for whatever reason, we recommend you look for other forms of aid so that your small business can survive this economic downturn.
For example, you can apply for a loan at Camino Financial with no Social Security Number.
Once the SBA receives an Economic Injury Disaster Loan application from a small business, it can take up to two to three weeks to make a credit decision. If you do are accepted to receive a Relief Loan, there might be another issue: on average, it takes the Small Business Administration around 15 to 30 days to release funds once an application has been approved. The total amount of time from application to receipt of funds could be a month and a half.
Now, this is not a complete disadvantage, as you could use a bridge loan to get the funds you need very fast.
Funds from a loan with Camino Financial are released in just a few days, which means you can use one of our loans as a bridge loan. In some cases, it could take only two days to receive funds.
Reasons Small Businesses Choose Camino Financial
If you need a bridge loan, or if you weren’t able to fulfill the SBA’s requirements, don’t worry, we’re here for you! Here are some of our advantages:
- Our members are people, not numbers. We like to build business partnerships with our clients over the long-term. We don’t look at our customers as numbers. We understand their financial needs and help them achieve their goals. Our bilingual customer service is always ready to help in any way they can.
- No collateral required. Small business loans from Camino Financial are unsecured. This means you don’t need to have any collateral. By contrast, some loans from the SBA do require collateral.
- Opportunity to graduate. After making regular payments for just 8 months, borrowers at Camino Financial are able to graduate to a lower interest rate and larger loan amount.
- Continuing education. Camino Financial offers resources, tools, and other materials to help our clients improve their financial performance and manage their money better. You can start using our online loan calculator to determine the exact monthly payment for a loan based on the payment terms, monthly interest rates, and the amount of the loan.
- Fewer requirements and restrictions. Compared to the SBA and other lenders, Camino Financial has less red tape, less stringent requirements, and fewer restrictions.
- Easy to get a quote online. Before committing, you can get a free and immediate quote online using Camino Financial’s user-friendly application.
Don’t Let the Crisis Wreck Havoc on Your Business
Camino Financial’s motto is “No business left behind“. And we do mean that in any situation. With our fast and easy application process, your small business can get the support it needs in a matter of days. With Camino Financial on your side, your business will be even stronger when the recession ends.
Apply today for a business loan with Camino and don’t let Coronavirus take control of your business.