COVID-19: Managing Cash and Accessing Disaster Relief Lending

Many companies are in need of access to working capital in these uncertain times where businesses of all types are seeing major reductions in revenue due to the Coronavirus pandemic. The Federal government has taken action to provide access to this much needed capital.  However, business owners and their finance teams will need to very closely manage their utilization of cash over the upcoming weeks and work proactively given the amount of time required to process loan applications.

Accessing SBA’s Coronavirus (COVID-19) Disaster Relief Lending

The application process for accessing Disaster Loans takes approximately 2 to 3 weeks based on feedback we received from the U.S. Small Business Administration (SBA).  Our recommendation to businesses in need of liquidity is to (1) create a list of essential required cash uses for the next 8 weeks, (2) determine your current cash available, not including any debt, (3) identify sources for debt financing including existing credit lines, (4) draw down on existing credit lines to provide the needed cash infusion for the upcoming 4 to 6 weeks and, (5) submit a Disaster Loan Assistance application as soon as possible to the SBA by visiting and selecting “Apply Online”.  Additional information about Disaster Relief Lending for COVID-19 can be found below:

  • The SBA is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.
  • Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
  • SBA’s Office of Disaster Assistance will coordinate with the state’s or territory’s Governor to submit the request for Economic Injury Disaster Loan assistance.
  • Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.
  • 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 without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
  • SBA offers loans with long-term repayments in order 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.
  • SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.

Please contact a member of the Caroprese team directly should you need any further assistance by calling 973-475-8090.



Caroprese & Company is a certified public accounting firm that provides innovative and strategic services to a diverse client base of individuals, families, small and medium size businesses, government entities, non-profits and multi-national corporations. Our dynamic professionals perform at a high intensity and are laser focused on providing excellence to our global clientele.



This publication is provided by Caroprese & Company as a service to its clients and colleagues.  The information and content included in this publication should not be construed as technical advice.  Questions regarding any matters discussed in this publication should be directed to Brandon Caroprese whose contact information is listed below:

Brandon Caroprese, CPA, MST
Tel. (973)-475-8090


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