Resources for Addressing Economic Losses due to the Public Health Emergency
The ongoing COVID-19 public health emergency, including the directive to close winery tasting rooms, is causing significant disruption to California’s businesses. Businesses that have, or are unsure whether they may have, insurance coverage for losses caused by this situation should contact their carriers promptly to inquire into their potential claims.
In addition, because there is a declared disaster including many counties in the San Francisco Bay area and other wine regions, affected wineries and other businesses typically are eligible to borrow up to $2 million under the U.S. Small Business Administration (SBA) Economic Injury Disaster Loans (EIDLs) program. Major employers may be able to borrow more than the typical $2 million limit.
These low-interest loans can provide working capital to cover ordinary and necessary financial obligations that cannot be met due to the ongoing public health emergency. Rates are set by a formula that is capped at 4%. Loans can be obtained to cover the actual economic injury, as determined by the SBA. The loans are intended to help businesses through the disaster and recovery period.
The approval of a loan is not guaranteed and loans must go through an underwriting process. Approved loans generally require collateral. The available amounts may be reduced or offset by the availability of business interruption or other insurance that covers the same losses. The SBA also assesses ability to repay as well as other potential contributions to cover the losses from business owners and affiliates in considering whether to approve the loans. To learn more or apply for a loan, go to https://disasterloan.sba.gov/ela.
Whether or not you are interested in an SBA loan, be sure to contact your insurer to confirm whether you may already have coverage for the ongoing interruption. For more information on the current declared disaster allowing for SBA EIDLs in California, including eligible counties and other terms, a fact sheet is available at https://disasterloan.sba.gov/ela/Declarations/ViewDisasterDocument/3429. Those in other states can visit https://disasterloan.sba.gov/ela/Declarations/Index to determine if they are in an eligible location.
For a list of Coronavirus related resources, please see our Resources Page.