Governor Reynolds announced on Saturday, March 21st that the U.S. Small Business Administration (SBA) has issued a disaster declaration for the state of Iowa as of January 31, 2020 and continuing. The declaration allows pandemic-impacted small businesses to apply for low-interest support loans. The declaration comes after Iowa Governor Kim Reynolds submitted a federal funding request via the SBA’s Economic Injury Disaster Loan program.
I saw an excellent article from Eric Engelmann on whether you should accept the disaster loans. Some of the considerations he mentioned include:
- There could be better options coming such as federal legislation.
- Collateral and personal guarantees are serious issues.
- Debt might not be the right answer.
- The SBA money might take too long to clear.
- Are there other faster options available? Family, friends, home equity?
- Banks may not be your friend.
Also, in listening to the Governor’s press conference this weekend she indicated that she will be announcing soon whether companies accepting the disaster loan will still be eligible for federal loans once they become available. She did not immediately know the answer to that question. That is something you will want to know before accepting such a loan.