Small businesses affected by the September 11 terrorist attacks
have one last chance to apply for the SBA's Economic Injury
Disaster Loans (EIDLs): The deadline, which has been extended twice
thus far, is now May 22.
To qualify for an EIDL, a small business must prove substantial
economic injury as a direct result of the terrorist attacks or a
federal action taken in response to the attacks. The disaster loans
are designed to provide eligible small businesses with the working
capital needed to pay standard operating expenses--such as fixed
debts, payroll and accounts payable--they are unable to pay as a
result of the attacks.
Since September 11, the SBA has approved $715 million in
disaster loans nationwide, according to the SBA. Of that, $380
million went to business owners and residents of the original
declared disaster areas in New York City and Northern Virginia and
the surrounding areas.
Small businesses can apply for a working capital loan of up to
$1.5 million, at an interest rate of 4 percent with a maximum term
of 30 years. The SBA determines the payment amount, the terms and
the amount of economic injury for each business--so be prepared to
present solid financial data proving your business's need for a
disaster loan.
Businesses may also qualify for disaster relief under a separate
program started in April, the SBA's Supplemental Terrorist
Activity Relief (STAR) program, which has an additional $4.5
billion in funding for 7(a) loans available. Small businesses can
apply for STAR loans--available until funds run out or January
2003--if they can show the lender direct or indirect adverse impact
as a result of the terrorist attacks, such as:
- difficulty in making loan payments on existing debt
- difficulty in paying employees or vendors
- difficulty in purchasing materials, supplies, or inventory
- difficulty in paying rents, mortgages, or other operating
expenses
- difficulty in securing financing
For an online application and instructions on applying for an
EIDL, go to www.sba.gov/disaster/eidl.html. For information on the
STAR program, call (800) U-ASK-SBA.