Getting SBA Money in Response to COVID-19

SBA Economic Injury Disaster Loan (EIDL)
(you know it’s true government when there are loads of acronyms, amiright?)

Overview

This program is a loan directly from the US Department of the Treasury, via the Small Business Administration (SBA). It’s a result of the legislation passed Tuesday March 17, 2020.

Eligible applicants include: small businesses, non-profits, and owners of rental property.

Ineligible applicants: agricultural enterprises; religious organizations; gambling concerns.

The intent of these funds are to help with operating revenue. This money is not intended for expansion or innovation, but to keep operations going.

Apply at: https://disasterloan.sba.gov/ela/

There is no cost to apply, and no obligation to accept loan.

Terms

1. Loan Amount: up to $2,000,000.
2. Interest Rate: 3.75% for small business; 2.75% for non-profit.
3. Amortization: up to 30 years, determined on a case-by-case basis.

Criteria

1. Acceptable personal credit history (if you find out the exact requirements, please let me know!)
2. Demonstrate ability to repay.
3. Use of Funds: pay fixed debts; payroll, accounts payable; bills.  (Not to supplant lost sales or for business expansion.)

Collateral

1. Required for loans amounts that exceed $25,000.
2. Applicants will not be declined solely on the basis of lack of collateral.  However, SBA will require whatever collateral is available, which may include liens on real estate.

Required Forms (these will auto-load at https://disasterloan.sba.gov/ela/ )

1. SBA Form 5 – Business Loan Application (complete within online application)
2. SBA Form 413 – Personal Financial Statement, required by everyone with ownership of 20% or greater (complete within online application)
3. The SBA Form 2202 – Schedule of Liabilities (complete within online application)
4. IRS Form 4506-T – Request for Transcript of Tax Return, required for the applicant entity and everyone with ownership of 20% or greater (download form, complete, sign, upload as PDF… this is not at the application link)
5. Additional information may be required, such as business or personal tax returns, year-end and/or interim financial statements, and monthly sales figures.

Note: non-profits will need to supply some additional materials upon application.