SBA Disaster Loan Requirements, Terms & Assistance



On March 27, 2020, the Federal Government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. CARES provides more than $2 Trillion in relief with $350 billion specifically for small business, meant to help companies and families affected by the coronavirus 2019 outbreak (COVID-19). 

The CARES Act enhances the Small Business Association Economic Injury Disaster Loans Program by adding a $10,000 advance payment available to businesses within a few days of submitting their full loan application. The advance payment does not have to be repaid if the loan is ultimately denied and provides business quick, emergency capital while the loan application is processed.

According to Forbes, “This CARES Act is a far-reaching measure that will put money into the hands of small business owners who are really suffering right now.”

SBA Disaster Loan Requirements

According to SBA, “Small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for a long-term, low-interest loan due to Coronavirus (COVID-19). The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.”

Declared Disaster Location

To get qualified for a SBA disaster loan your business must operated within a declared disaster location. Check here for SBA declared disaster zones.

Credit Score

To qualify you will need to pass a credit check. If you do not have good credit, the SBA will consider other factors such as income, rental history, etc.

Ability to Repay

The SBA considers your ability to repay the loan back in full.

Form of Collateral

If you are applying for a loan of more than $25,000, SBA might require collateral to complete your loan process.

SBA Disaster Loan Terms

The information below will give you a quick looks at the terms and rates for the Business Physical Disaster Loan and the Economic Injury Disaster Loan as provided by MerchantMaverick.

Borrowing Amount: $2 million Maximum

Term Lengths:

  • 30 years Maximum if credit isn’t available elsewhere
  • 7 years Maximum if credit is available elsewhere

Interest Rates:

  • 4% Maximum if credit is not available elsewhere
  • 8% Maximum if credit is available elsewhere


No fees from the SBA; possible fees from lawyers or outside agencies

The SBA disaster loan provides working capital to applicants that are eligible. For faster loan processing the business applying must have operated for at least one year before the disaster. Eligibility for the loan must consider compensated from other sources to offset the economic injury. Other sources include but aren’t limited to: (1) grants or other reimbursements (including loans) from private organizations or government agencies, and (2) claims for civil liability against other government entities, organizations, or individuals.

Additional Information May Also Be Required

  • Complete copy, including all schedules, of the most recent Federal income tax return for each principal owning
  • 20 percent or more, each general partner or managing member, and each affiliate when any owner has more than 50 percent ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management
  • If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
  • A current year-to-date profit-and-loss statement
  • Additional Filing Requirements (SBA Form 1368) providing monthly sales figures for will generally be required when requesting an increase in the amount of economic injury.

SBA Disaster Loan Assistance

The SBA is offering low-interest disaster loans for businesses of all sizes, homeowners, renters, and non-profit organizations.

SBA Disaster Loan Process

  1. Download the forms on the SBA website below
  2. Fill out your information
  3. Upload your application forms on this page
  4. If you choose to mail your application, then see Mailing Instructions below

U.S. Small Business Administration Processing and Disbursement Center

14925 Kingsport Rd. Ft. Worth, TX 76155-2243

How To Apply for a SBA Disaster Loan

According to Fundera, there are 3 ways to to apply for a SBA disaster loan:

  1. Online application: You can use the online application to apply for the SBA disaster loan
  2. Mail your application: You can also mail in your application by sending it to 14925 Kingsport Rd. Ft. Worth, TX 76155-2243
  3. Fill out your application in-person: You can also apply in-person at a Disaster Recovery Center to receive assistance from an SBA rep.

SBA Disaster Loans Interest Rate

According to FEMA, “Interest rates for SBA disaster loans can be as low as 1.813 percent for homeowners and renters, 3.58 percent for businesses and 2.5 percent for private nonprofit organizations, with terms up to 30 years.”

  • 4% Maximum if credit is not available elsewhere
  • 8% Maximum if credit is available elsewhere


No fees from the SBA; possible fees from lawyers or outside agencies

What Can SBA Disaster Loan Be Used For?

According to Divvy, SBA disaster loans can be used for:

  • Fixed debts
  • Employees payroll
  • Outstanding Bills and invoices
  • Business adaptations (mobile/online options, delivery, etc.)

An coronavirus SBA disaster loan can be used to cover losses and costs that wouldn’t have occurred except for the quarantines, social distancing, complications, and other necessary measures made by COVID-19.

According to SBA, “An SBA disaster loan can be used to repair or replace personal property, real estate, equipment and machinery, and inventory and business assets. SBA says, “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 or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).”

4 types of disaster loans

SBA Disaster Declarations

View a list of the current SBA disaster declarations.

Stimulus Package Help for Small Business

According to MarketWatch, “Small businesses will have access to $350 billion in forgivable loans, but they have to meet certain requirements.”

Need Help Filling Out Paperwork to Make Sure You Get The Money?

Let Stidham Legal, PC focus on helping you get SBA relief while you continue focusing on your business during these trying times. Time is money, and by hiring Stidham Legal, PC, you assure your application will be done on time, and correctly.

Contact Stidham Legal, PC today to get help processing your application correctly. [email protected] or (219) 232-6099.


SBA Disaster Loan Pros and Cons

According to Divvy, SBA disaster loan pros and cons include:

SBA Disaster Loan Pros

  • Pro: Easy application process
  • Pro: Fast approval
  • Pro: Fast dispursement
  • Pro: Low APR

SBA Disaster Loan Cons

  • Con: May require specified revenue or high credit score
  • Con: Short term lengths
  • Con: Increased repayment frequency
  • Con: Additional fees