1. What Are COVID-19 SBA Disaster Loans?
According to SBA.gov “The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses (“Small business” defined by the number of employees or average annual receipts) suffering substantial economic injury as a result of the Coronavirus (COVID-19).
The SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act, an Economic Injury Disaster Loan declaration.”
2. How Does A Business Qualify For The Disaster Loan?
While many factors go into qualifying for an Economic Injury Disaster Loan (EIDL), a primary factor is whether or not a small business has less than 500 employees and can prove they have a financial impact or loss directly associated with COVID-19.
3. What Are The Loan Terms?
The interest rate for non-profits organizations is 2.75%. The interest rate is 3.75% for small businesses. SBA offers loans allow long-term repayments up to a maximum of 30 years in order to keep payments affordable. Terms are determined on a case-by-case basis and structured with a 12-month principal and interest deferral.
4. What Can The Loan Be Used For?
These loans may be used to pay payroll, fixed debts, accounts payable, and other bills that otherwise could not be paid due to the COVID-19 economic impact.
5. What Information Is Required To Apply For The Disaster Loan?
Below Is The List Of Forms Provided By The SBA That Is Required To Apply For COVID-19 SBA Disaster Loans.
- Completed application (SBA Form 5).
- Tax Information Authorization (IRS Form 4506T).
- Acceptable credit history.
- Personal Financial Statement (SBA Form 413).
- Schedule of Liabilities (SBA form 2202).
- Most Recent Federal Income Tax Returns for the Application Business (or an explanation if not available).
6. Additional Information SBA May Request.
All Information Below Can Be Found On The Small Business Administration (SBA) Website Located At SBA.gov
- Federal tax returns for principals owning 20% or more of the business, for partners/managing members or affiliates (when the owner has more than 50% ownership).
- Year-end financial statements for the applicant if a federal tax return has not been filed.
- Interim financial statements
- Additional information may be required.
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