Abbott requests emergency designation to obtain disaster loans for small businesses
Governor Greg Abbott on Tuesday requested an emergency designation from the Small Business Administration for the entire state of Texas in order to access the agency’s disaster loan program for small businesses.
The SBA will consider the request, and if it grants an Economic Injury Disaster Declaration, small businesses in Texas will be able to apply for long-term, low-interest loans from the federal agency.
“At a time when small businesses are hurting from the economic impact of COVID-19, the State of Texas is committed to helping these businesses receive the financial relief they need to continue operating,” Abbott said in a statement.
The SBA Tuesday morning announced it would loosen the criteria for states seeking the economic injury declaration related to the impact of the new coronavirus, called COVID-19. Typically, SBA loans are only available to small businesses within counties identified as disaster areas by a Governor. The SBA is now granting disaster assistance loans related to damages from COVID-19 statewide.
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SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance for each affected small business.
Following Abbott’s action on Tuesday, it will likely take a few days for the SBA to approve the designation and open loan applications for small businesses in Texas. Once the SBA receives an application from a small business, it typically takes between two and three weeks to make a credit decision, according to Carol Chastang, an SBA spokesperson. If the loan request is approved, the SBA can disperse the loan within five days of receiving the loan closing documents.
