Small businesses are the heart of our communities. We all know someone who is a small business owner or employee. They employ almost 50 percent of the workforce in Arkansas, and if you look at communities throughout our state, these are the businesses that are employing our families and friends.
Although everyone is struggling to cope with this unprecedented crisis, small businesses find themselves particularly impacted. We at SBA are front and center in providing economic development resources and now in their relief and recovery effort, providing vital economic infusion through our economic injury disaster loan program. The good news is that many of our small businesses are displaying incredible resilience and innovation as they navigate this challenging environment.
The SBA has created a small business resource page dedicated to those impacted by COVID-19 at SBA.gov/Coronavirus. Here you will find CDC requirements for small businesses, instructions for how to access SBA loan products outside of EIDL, and much more.
Although the economic and financial security are very important, we want to emphasize that community members’ physical health and well-being is the priority. We are encouraging small businesses owners to do their part to keep themselves, their employees, and their customers and healthy by following the Centers for Disease Control and Prevention’s most up-to-date information on COVID-19, as well as Guidance for Businesses and Employers to Plan and Respond.
Additionally, on March 20, 2020 the SBA approved a declaration request from Governor Hutchinson to offer low-interest federal Economic Injury Disaster Loans (EIDL) for working capital to Arkansas small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
The disaster declaration makes SBA assistance available in the entire state of Arkansas. EIDL offer up to $2 million in assistance and can provide vital economic support to small businesses impacted by this disaster.
Here is some key information you need to know:
Who can apply?
In order to be eligible, you must be a small business (500 employees or less).
- Small businesses affected by the disaster – common eligible businesses include: retailers, restaurants, recreational facilities, tourism-based businesses, manufacturers, owners of rental property, hotels, wholesalers, and many more.
- Private nonprofits
- Small agriculture cooperatives are eligible, but agricultural enterprises are not
- Small aquaculture businesses
How can I apply?
Although paper applications are accepted, filing electronically is easier, faster and more accurate. Apply here.
How can the loan be used?
The loans are for working capital which includes paying interim payment on fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the disaster’s impact. The loan does not cover lost sales.
How much can I apply for?
You will not be asked how much you would like to borrow. The SBA uses the information you provide to determine the loan amount. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.
What do I need to have ready?
- Business Owner’s information
- Contact information and social security numbers for all applicants
- Employer Identification Number (EIN) for business applicants
- Insurance information
- Financial information (e.g. income, account balances and monthly expenses) – Know the total amounts and payments due for debts that will be paid over the next 10 months or longer (i.e. mortgages, student loans, credit cards, etc.)
The interest rate is 3.75 percent for small businesses with long-term repayments to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
Those interested are asked to call the SBA Customer Service Center at 1-800-659-2955, or 1-800-877-8339 if deaf or hard of hearing. They can also email firstname.lastname@example.org. Applications are available at disasterloan.sba.gov.
Additionally, across Arkansas SBA’s network of resource partners stands ready to assist small businesses. These partners are essential to assisting clients across the state, seeing clients virtually to assist them in preparing loan applications and seeking guidance in leading their businesses in the uncertain times.
- Arkansas Small Business & Technology Development Center
- SCORE – Counselors and Mentors for America’s Small Businesses
- Arkansas Women’s Business Center
- Startup Junkie Consulting
- AR Conductor
- Arkansas Procurement Technical Assistance Center – Contracting Assistance
I am reminded every day through in-person and online interactions with small businesses and SBA lenders across the state that the entrepreneurial spirit is alive and well. Small businesses throughout Arkansas and the nation are facing these challenging times with innovation and courage, just as they did when they took the initial leap into business ownership.
I am grateful to the Arkansas Economic Development Commission for its leadership in developing essential small business resources at the state level and mayoral leadership for helping safeguard and support local communities and residents. Our chambers of commerce are essential in helping us get resources to every small business in Arkansas and to help make sure people are aware of the available resources, including new relief as it is approved by the federal government. Stay informed by signing up for our email newsletter at www.sba.gov/ar.
Edward Haddock is the District Director at the U.S. Small Business Administration in Little Rock.
Editor’s Note: The opinions expressed in op-eds are those of the authors and do not necessarily reflect those of Arkansas Money & Politics or About You Media Group.