As the situation surrounding the spread of COVID-19 (coronavirus) continues to evolve in Florida, the losses to small businesses are accruing even in the middle of spring break and packed beaches. With the suspension of operations across the cruise industry, flight and hotel cancelations, and the possibility of a statewide quarantine looming, people are holding their money close. In short, the South Florida culture of Go, See, and Do has taken a Titanic vs. Iceberg hit. It’s a disaster, and Floridians know how to handle those, even if it’s one that we’ve never seen before.

Florida small business disaster loans are now available just as they would be for the aftermath of a hurricane. On March 1, 2020, Gov. DeSantis issued Executive Order Number 20–52, opening the way for Florida’s well-tuned disaster machinery to begin turning. While some people might be familiar with small business disaster loans in the aftermath of a hurricane, this is the first time that one has ever been declared in a health emergency.

How Do Florida Small Business Disaster Loans Work?

These loans are intended to help out small business owners between the time a disaster strikes and either recovery or the receipt of federal disaster assistance, insurance monies, or payments from customers or clients. These are not grants and they must be repaid. Moreover, small business disaster loans are short-term, one-year loans with an APR of 12% that are only meant to bridge a gap in funding. There are qualifications and an application process, during which the business must demonstrate other financial resources in order to receive one of these loans. The business must be for-profit, privately held, have between two and 100 employees, and have a business address in the state of Florida. In the case of Florida small business disaster loans for COVID-19, the business must have been established prior to March 9, 2020.

The business applying for the loan must be able to prove economic injury as a result of the coronavirus. As part of the application process, the borrower must agree that the loan is only to be used for maintaining or restarting the business.

Is Every Small For-Profit Business Eligible?

Not exactly. There are some limitations on businesses that derive more than one-third of their profits from gambling. Also banned from obtaining Florida small business disaster loans are escort services, hot tub facilities, massage parlors, or other sexually oriented businesses. It goes without saying that small businesses engaged in illegal activities should not apply. There also are limits on eligibility when it applies to partnerships – the applicant must individually or collectively own 51% or more in equity.

How Long Do I have to Apply?

Businesses may apply for these loans until May 8, 2020, though that may be extended depending on the spread of COVID-19. Since these short-term Florida small business disaster loans are made with public monies, they are very much contingent on the availability of funds. In other words, first-come-first-served.

What Do I Need to Apply?

Naturally, you can’t just walk in and get a check. There is a process and even though you apply, you may be denied a loan. You will need to submit the following documentation:

Your state driver’s license or identification card, federal identification card, or passport.

Business tax returns of all individual applicants going back two years, if available.

Personal tax returns of all individual applicants going back two years, with attached schedule C.

Employer tax documentation.

It’s optional to submit additional information that might give the loan review committee a little more to go on when making a decision regarding your loan. You may be able to better your chances by submitting a loan summary detailing your business, your property, assets, and resources and what you intend to accomplish with the loan.

When a Loan Isn’t Enough

For a struggling small business, a disaster like this one can push you over the edge. At least with a hurricane, you have a defined timeframe of when it will strike and when it will leave, as well as an idea of the damage it may do. We have none of these certainties as we face a global pandemic of coronavirus. We are hopeful that flattening the curve will work to halt the spread of the virus, but right now there are no certainties except that our entire world is about to change.

In the coming weeks, we may see a moratorium on rents and mortgages, plus some sort of federal aid to businesses, industries, and individuals that will keep the economy from grinding to a complete halt. If your finances were not hale and healthy before the virus, even stimulus, bailouts, and loans may not be enough to get you off the hotspot. You may be able to work with your lenders and creditors to negotiate reductions in interest, skipped payments, or even forbearance until the emergency is over. Lenders may or may not put in place their own programs and do outreach to their customers.