SBA Loans are available to small businesses and to self-employed workers, for eligible businesses are defined by the SBA, with an exception for non-profits during the Covid-19 outbreak.
If the business is unable to meet its obligations and has an "injury" to its ability to pay ordinary and necessary operating expenses as a result of Covid-19, this loan provides the necessary working capital to help businesses survive until normal operations resume after "disaster."
You can receive funds of up to $2 million at rates of Business: 3.75%, Non-Profits: 2.75% to meet financial obligations and operating expenses that could have been met had the disaster not occurred. You will not be able to refinance existing business debt with this loan.
These are made available according to your state and which states have been declared federal disaster zones.
How to Apply:
- Choose "Economic Injury Disaster" Loan option from SBA.gov website.
- Be careful of fraudulent links and ensure you are on the government site and choosing the above option.
- You will need to Register and Create an Account.
- PDF & Paper forms are able to be submitted if there is difficulty with the website
- All documentation will need to be submitted at one time
- Once your application is submitted, you will be assigned a loan officer or case worker who will work through additional details with you
- They are reporting 2-3 weeks for processing times
What you need to have prepared::
- Completed Loan Application
- Signed Tax Information Authorization (IRS Form 4506T)
- Federal Income Tax Return — Business (complete copies of most recently filed year)
- Federal Income Tax Return — Personal for Owners (complete copies of most recently filed year)
- Schedule of Liabilities - Business
- Personal Financial Statement
- Profit and Loss Statement - Business for Prior Year and Year to Date
- Balance Sheet - Business for Prior Year and Year to Date
- Monthly Sales Figures for the Last 3 Years
- Projection Figures of Income and Expenses for future as you are affected by Covid-19
- Additional Narrative and Financial Information to Help Establish your Economic Loss
Copies of PRIOR YEAR FG Completed Tax Returns are Available HERE
- Personal guarantees are no longer required as part of the CARES Act.
- If you are asking for funding of $25,000 and under, no collateral will be required.
- For amounts over $25,000, collateral will be required and a lien will be filed if it is available
- A Term of 30 years will most likely automatically apply
- However, all terms are determined on a case by case basis, based on the borrower'ability to repay
- There are no pre-payment penalties
- There is no Guaranty Fee (unlike regular SBA loans)
- If you currently owe federal debt such as taxes or student loans and are not in a recognized payment plan or official hardship status, you could be considered ineligible for the loan.
- Try to use website during off-peak hours: Before 7am EST and After 9pm EST
- Problems with the Chrome browser have been reported
- Have all of the required information ready ahead of time. There is no way to update or upload new documents after you hit the submit button.
- Any missing information will cause delay
- Any extra information will also cause delay, so only submit the information that is asked for and nothing extra.
- Make sure to save your Submission Number
- Never say "How Much can you give me?"or "I will take whatever you will approve." You have to show them you are mindful of what you are asking and you have thought through the numbers.