Texas Construction Law Blog

The Small Business Administration (SBA) has designated COVID-19 as a qualifying event for the provision of Economic Injury Disaster Loans to small businesses and private non-profits. As a result, on March 17, 2020, Governor Greg Abbott requested an emergency designation from the SBA for the entire state of Texas in order to allow Texas businesses to access the loan program. The SBA is considering 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 SBA.

Economic Injury Disaster Loans are intended to provide the necessary working capital to help small businesses survive until normal operations resume after a disaster. The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Loan amounts are based on your actual economic injury and your company’s financial needs.

According to the SBA, if you have suffered substantial economic injury and are one of the following types of businesses located in a declared disaster area, you may be eligible for an SBA Economic Injury Disaster Loan:

• Small Business
• Small agricultural cooperative
• Most private nonprofit organizations

Substantial economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. Small businesses are those that meet the SBA’s size standards. A size standard, which is usually stated in number of employees or average annual receipts, represents the largest size that a business (including its subsidiaries and affiliates) may be to remain classified as a small business for SBA purposes.

The definition of “small” varies by industry. Below is the section of the SBA’s table of small business size standards that applies to the construction industry:

Additional information about the size standards can be found here.