The Small Business Administration (SBA) has authorized disaster assistance loans for small businesses impacted by the Coronavirus. The SBA is working directly with state governors to provide targeted, low-interest disaster recovery loans to small businesses severely impacted by the virus. There are new relaxed criteria for faster, easier qualification and statewide access following an economic injury declaration from the state.
Once a declaration is made, the information on the application process for Economic Injury Disaster Loan assistance will be made available to affected small businesses within the state.
These Economic Injury Disaster Loans offer up to $2 million in vital economic support to small businesses to help overcome the temporary loss of revenue. 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 and 2.75% for non-profits.
SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined case-by-case, based upon each borrower’s ability to repay.
Steps to apply:
Please follow the steps below:
- Review Eligible Disaster Areas - https://disasterloan.sba.gov/ela/Declarations/Index
- Apply Online - https://disasterloan.sba.gov/ela/Account/Login
- Check Application Status
- A loan officer will be assigned to the case and will be assisting in determining the dollar amount of assistance that will be available to the business.
Items that will need to be submitted with the application:
- Disaster loan application (SBA Form 5)
- Related to economic injury from COVID-19, you’ll need information about your business and its owners including business type, Federal ID, business property address (physical location), contact info for owner/manager for the Loss Verification inspection, application completion, current estimated loss (can be unknown at this time), and your current insurance information.
- Tax Information authorization (IRS Form 4506T)
- Needs to be signed by each applicant or more than 20% of the owner(s) of each applicant business to share tax data with the SBA.
- Complete copies of most recent Federal Tax Returns (Up to 3 years)
- Personal Financial Statements (SBA Form 413) (Up to 3 years)
- Needs to be signed by each applicant or more than 20% of the owner(s) of each applicant business
- Schedule of liabilities including all fixed debts (SBA Form 2202)
You may also need:
- Most recent year-end profit & loss statements. (Up to 3 years)
- Current year to date profit & loss statement.
- Accounts Receivable and Accounts payable aging schedules.
- Additional filing requirements (SBA Form 1368) – monthly sales figures, forecasts etc.
How can we help?
- We can assist in preparation, organization, and information related to these forms on behalf of our clients and business owners
- Organizing Federal Tax Returns and associated schedules.
- Creating Financial Statements for both prior and current year.
- Creating personal financial statements and schedule of liabilities.
- Creating pro-forma forecasts.
Please note eligibility for this program is determined on a case-by-case basis and applications are reviewed in the ordered received. Currently, there has not been guidance concerning time frames for application acceptance or release of funds.
Please reach out to your UHY small business cpa if you have any questions regarding eligibility and benefits related to this program.