Disaster Loan Assistance from the SBA for Small Businesses and private Non-Profits (SBA file date: 20200401)
Summary
This U.S. Small Business Administration slide deck from the San Antonio District Office explains disaster loan help under the CARES Act, which it says was signed into law Friday, March 27, 2020. It describes Economic Injury Disaster Loans of up to $2 million with no payments for 12 months, 3.75% interest for small businesses and 2.75% for private non-profits and 30-year repayment, plus an advance of up to $10,000 that will not have to be repaid. EIDLs over $25,000 require collateral, and there is no personal guarantee for loans under $200,000. The Paycheck Protection Program slides list an interest rate of 0.5%, a maturity of 2 years, a first payment deferred for six months and a 100% guarantee by SBA, with at least 75% of the forgiven amount used for payroll. The deck also covers 7(a) loan deferments, the SBA Debt Relief Program and Express Bridge Loans of up to $25,000.
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Full text
U.S. Small Business
Administration
Agenda
1. Disaster Loan Assistance from the SBA
for Small Businesses and private Non-Profits
2. Resource Assistance from the SBA and our Partners
3. Additional Resources
These slides will be made available to download at:
www.sba.gov/tx/sanantonio
The CARES Act
https://www.congress.gov/bill/116th-congress/house-bill/748/text
• Signed into law Friday, March 27, 2020
• SBA policy regarding the CARES Act is not yet complete
• We can not offer legal interpretation of the Act
• We can not comment on portions of the Act unrelated to the SBA
Economic Injury Disaster Loans (EIDL)
Loans up to $2 million; no payments for 12 months
Small businesses and private non-profits are eligible
3.75% interest rate for small businesses without credit available elsewhere; businesses with credit
available elsewhere are not eligible.
2.75% for private non-profits
Long-term repayments for COVID crisis will be 30 years
May be used for fixed debts, payroll, accounts payable and other bills affected by the disaster
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Additional EIDL Details
No cost to apply
• No obligation to take the loan (if offered)
Not intended to replace lost sales/profits or for expansion
Amount is determined by SBA from the information you provide
Existing SBA Disaster or Business loans do NOT make you ineligible
• Loans can not be consolidated
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Additional EIDL Details
Personal guarantee requirements:
• None if loan is under $200,000
• If over, then guarantee form all 20% or greater owners
Collateral
• If over $25,000 EIDLs require collateral
• SBA will not decline for a lack of collateral, but requires the pledge of what is
available
• Does not require primary residence in Texas
Credit Elsewhere – requirement is waived by CARES Act
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Who is Ineligible
• Any business where gambling is more than 1/3 of annual gross revenue
• Casinos & Racetracks where their purpose for being is gambling
• Businesses of a prurient sexual nature
• Pawn Shops is more than 50% of income derives from interest
• Religious Organizations
• Investment or Lending companies
• Charitable Organizations (private non-profits are OK)
• All Speculative Activities
• Agricultural Enterprises
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How to Apply for EIDL
• Works best with Internet Explorer or Microsoft Edge
• For the COVID-19 disaster everything will be online
• Disaster Declaration #: TX-00544
• The website for applying for EIDL is https://covid19relief.sba.gov/
• You may also contact the SBA disaster customer service center:
• 1-800-659-2955
• e-mail disastercustomerservice@sba.gov
• TTY: 1-800-877-8339
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Information on the Application
https://www.sba.gov/disaster/apply-for-disaster-loan/index.html
Business Loan Application (Form 5) EIDL Supporting Information (form p-019)
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Economic Injury Disaster Loan Advance
Advance of UP TO $10,000 in Capital
• The SBA’s Economic Injury Disaster Loan program provides small
businesses with working capital loans of up to $2 million that can
provide vital economic support to small businesses to help
overcome the temporary loss of revenue they are experiencing.
• The loan advance will provide economic relief to businesses that are
currently experiencing a temporary loss of revenue.
• Funds will be made available within three days of a successful
application, and this loan advance will not have to be repaid.
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Economic Injury Disaster Loan Advance
Advance of UP TO $10,000 in Capital
• This advance may be available even if your EIDL application was
declined or is still pending and will be forgiven.
• In order to qualify for the Advance, you need to submit the new
application [www.covid19relief.sba.gov] even if you previously
submitted an EIDL application.
• This will not impact the status or slow your existing application.
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After Applying
Loan Processing Decision
• Information verified; you may be asked for more info
• Forecasts completed to determine the EIDL amount
• A loan officer contact you
• Decision normally takes up to 4 weeks
Loan Closes and Funds Disbursed
• Sign and Submit loan documents
• initial disbursement of $25K within 5 days
• Case Manger assigned that will help you with the rest
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Important Notes About Your Application
• Please complete and submit everything required
• Delays occur due to missing / incomplete information
• If more funds are needed, you can submit supporting documents and
request an increase
• If less funds are needed you can request a reduction
• If denied you will be given up to six months to provide new information and
a written reconsideration request
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Important Notes About Your Application
• If you were in the middle of an application when the old site crashed, you
will need to apply on the new site: https://covid19relief.sba.gov
• Reality check: Some people are trying to scam others in SBA’s name.
• There is no immediate deadline for an EIDL application
• it does not cost anything to apply, get the papers together, no credit
card is needed, etc.
• Beware of any emails or websites ending in "SBA.HELP"
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Deferments of Your Existing SBA Loan
7(a) Loans and
504 Loans Existing Disaster Loans
Micro Loans
• Lenders may help with • CDCs may help with • SBA will defer existing
temporary cash flow temporary cash flow loan payments through
issues by deferring issues by deferring Dec. 31, 2020
payments payments automatically.
• For 7(a) loans, up to six • The amount deferred • Borrowers of home and
(6) consecutive months should not exceed six (6) business disaster loans do
• For micro loans, up to six cumulative months or not have to contact SBA
(6) consecutive months 20% of the original loan to request deferment.
• No deferment may not amount, whichever is less
cause the loan to extend
beyond the maximum
seven (7) year maturit
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SBA Debt Relief Program
The program will provide a reprieve to small businesses as they
overcome the challenges created by this health crisis.
NEW 7(a) Loans
• SBA will pay the principal and interest of new loans issued prior to
Sept 27, 2020
CURRENT 7(a) Loans
• SBA will pay the principal and interest of current loans for a period of
6 months
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SBA Express Bridge Loans
Designed to supplement the Agency's Direct disaster loan capabilities
• EBL loans can only be made by SBA Express Lenders
• The small business must have been operational when the declared
disaster commenced and must meet all other 7(a) loan eligibility
requirements
• The EBL loan must be structured as term loans not to exceed 7 years
• Revolving lines of credit are not permitted
• Maximum amount of an EBL loan is $25,000
• not required to take collateral for EBL loans
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www.sba.gov/tx/sanantonio
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Paycheck Protection Program
Part of the CARES Act
• The Paycheck Protection Program will provide capital to keep
employees on payroll and small businesses operating.
• You cannot use your EIDL for the same purpose as your PPP Loan.
(double dipping)
• Program will be available retroactive from Feb 15, 2020, so employers
can rehire their recently laid-off employees through June 30, 2020
• The loan will be fully forgiven if the funds are used for payroll costs,
interest on mortgages, rent, and utilities.
• at least 75% of the forgiven amount must have been used for payroll
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Paycheck Protection Program
• Eligible businesses including:
• non-profits
• Veterans organizations
• Tribal concerns
• sole proprietorships
• self-employed individuals
• independent contractors
• with 500 or fewer employees, or no greater than the number of
employees set by the SBA as the size standard for certain industries
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Paycheck Protection Program
• All loans under this program will have the following identical
features:
• Interest rate of 0.5%
• Maturity of 2 years
• First payment deferred for six months
• 100% guarantee by SBA
• No collateral
• No personal guarantees
• No borrower or lender fees payable to SBA
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Important Resource Assistance from SBA
SBA has three local Resource Partners
• South-West Texas Border Small Business Development Centers (SBDC) Network
• SCORE Chapters – San Antonio and Austin
• Liftfund Women’s Business Center (WBC)
A range of help during the downturn, to include:
• Cash flow management / short term financial management
• Messaging / Social Media to stay engaged with customers
• Import/Export
• Supply Chain
• Strategic Planning and Financial Tune-Up; prepare to prosper after the disaster
• Planning for further disasters / Risk management / Insurance counseling
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Contact Information
Austin SCORE Chapter #249 – Main Office LiftFund Women’s Business Center South-West Texas Border SBDC Network Office
Westland Park
5524 Bee Caves Rd., Ste. M-100 San Antonio Central Public Library UTSA Institute for Economic Development (IED)
Austin, TX 78746 600 Soledad Street 501 W. Cesar E. Chavez Blvd.
Phone: 512.928.2425 San Antonio, TX 78205 San Antonio, Texas 78207
www.scoreaustin.org www.liftfund.com www.txsbdc.org
San Antonio SCORE Chapter #164 – Main Office UTSA SBDC – San Antonio Sul Ross – Eagle Pass
Hipolito Federal Courthouse 210.458.2450 830.758.5022
2nd Floor, Ste. 298
615 E. Houston Street Texas State SBDC – Austin UHV SBDC – Victoria
San Antonio, Texas 78205 512.420.9379 361.485.4485
Phone: 210.403.5931
www.sanantonioscore.org Veterans Business Outreach Center TAMIU SBDC – Laredo ASU SBDC – San Angelo
956.326.2847 325.942.2098
1407 E. Freddy Gonzalez Dr.
Edinburg, TX 78452
www.utrgv.edu/vboc
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SBA San Antonio
District Office
615 E. Houston St. Suite 298
San Antonio Texas 78205
(210) 403-5900
www.sba.gov/tx/sanantonio
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