There many moving parts right now as Congress weighs legislation designed to help the economy during the coronavirus crisis. Small businesses — many in freefall, already closing and laying off all their staff — can’t wait for Congress to get its act together, and they don’t have to. The Small Business Administration is already taking applications for disaster loans, and many businesses should get in line for these low-cost, generous-term loans.
Below is my conversation with Gerri Detweiler, Nav.com’s director of education and one of the best at making money and credit simple for consumers and small businesses. Here are a couple of highlights, but you should listen to her explain it herself.
- SBA loans are a good deal. Businesses won’t have to begin paying them back for a year, the rate is 3.75%, and terms can last up to 30 years.
- Lending decisions might take 45 days. That’s the bad news. But the SBA hopes to fast-track the first $25,000 of a loan for each business, making that money available in less than a month. That might be enough to help a small brewery make payroll, for example. It’s still a month away, though.
- Plenty of people qualify for small business loans — even those who file taxes as sole proprietors. That means Uber drivers and even freelance journalists.
- In previous disasters, about 50% of loan applications were granted. So it’s not a sure thing, but it’s a pretty good bet
- If you have any notions you might benefit from an SBA loan, don’t wait get in line. Grab your number at the deli counter now. You can always turn the funding down later.