The global impact of COVID-19 (Coronavirus) is forcing many business owners to make key decisions everyday on how they will be able to sustain this pandemic and maintain their operations throughout the coming weeks and months. The U.S. Small Business Administration (SBA) has released updated criteria for states requesting disaster assistance loans for small businesses impacted by Coronavirus. The two immediate impacts of this changed criteria are:

• A faster and easier qualification process for states seeking disaster assistance. Under the new regulations, states are now only required to certify that at least five small businesses within their state/territory have suffered substantial economic injury, regardless of where those businesses are located. Previously, location was a factor in obtaining this assistance.
• More expanded and statewide access to SBA disaster assistance loans for small businesses. Under the new criteria, disaster assistance loans are available statewide, where previously, they were only available to small businesses within counties identified as disaster areas by the Governor.

SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance for each affected small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. 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. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. SBA offers loans with long-term repayments up to a maximum of 30 years.

There are several other items small businesses should consider during these uncertain times:

1. Cash flow: Talk to you bank about delaying interest and principal payments and your landlord about delaying rent payments and rent abatements. Certain utility providers are also allowing for interest free deferrals during these times.
2. Workforce: Make sure your employees are updated on your processes and procedures to keep them safe during this time. Businesses have a responsibility to their employees to make sure they are taking measures to protect them. If you anticipate being in a difficult situation down the road with a large number of employees but no profits coming in, talk to your legal counsel immediately about rules related to unemployment payments. These rules could change at any time so you should act quickly.
3. Supply chain: Stay informed on possible supply chain issues. While many companies report they have not experienced significant issues, this could change at any time.
4. Customer demand: Companies such as Amazon appear to be restricting incoming shipments to their warehouses so they can best respond to customer demand.
5. Payroll: Coordinate with your payroll providers to ensure payroll will go out even if their offices are closed and ensure they are able to implement any new vacation or sick time polices.
6. Insurance: Communicate with your provider related to the business risk in this environment, how your policies work and the best way to protect your company.

For additional information, please visit the SBA disaster assistance website at SBA.gov/Disaster or contact one of RubinBrown's Entrepreneurial Services Group professionals.

We will continue to send more information as the SBA and others distribute additional guidance.

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