El Paso businesses and nonprofits grappling with the effects of the coronavirus pandemic now have access to disaster assistance loans to help them stay afloat.
The Small Business Administration is offering emergency low-interest loans to small businesses that experience significant economic hardship due to the coronavirus pandemic, which has rapidly become an economic crisis as well as a medical one.
El Paso SBA district director Dante Acosta’s advice for El Paso business owners is to begin looking into their financing options and start the process now.
“What I encourage people to do is get the process started early before you need it,” Acosta said. “Dig the well before you are thirsty.”
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million. The rate is fixed at 3.75% – 2.75% for nonprofits. Since interest rates are at historic lows, it’s important for employers to consider all of their financing options, not just the disaster assistance loans, Acosta said.
The loans are only available to businesses that have exhausted their other lines of credit and are experiencing economic hardship. Repayment can be up to 30 years, and there is an automatic payment deferral of four months that can be extended up to six months.
The application process begins online at https://disasterloan.sba.gov/ela.
The loans became available to applicants in El Paso County last Tuesday after the SBA declared a disaster in New Mexico, following a request by that state’s governor, Michelle Lujan Grisham. It applied to several New Mexico counties, including Doña Ana County and its Texas neighbor, El Paso.
“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact,” SBA administrator Jovita Carranza said in a statement. “Disaster loans can provide vital economic assistance to small businesses to help overcome the temporary loss of revenue they are experiencing.”
SBA loans can involve a lot of paperwork and more government red tape than traditional loans, but Acosta said they are working hard to get the program up and running smoothly and get financing to the small businesses that need it quickly.
“My understanding is it will not be so daunting that it doesn’t do you any good,” Acosta said.
In addition to the new economic injury disaster loans, the SBA offers several other loan programs, as well as counseling for small businesses.
“We respect them and care about them, and we want to support our small business owners because they live next to us, they go to our churches and play in little league – they are our neighbors,” Acosta said.
Email Robert Gray at firstname.lastname@example.org or call (915) 534-4422 ext. 143.