Disaster Loan Assistance from the US SBA for Small Businesses and Non-Profits (SBA file date: March 26 2020)
Summary
A U.S. Small Business Administration slide presentation from its Houston office (www.sba.gov/tx/houston) on disaster loan assistance for small businesses and non-profits during COVID-19. It describes Economic Injury Disaster Loans of up to $2 million with no payments for 12 months, at a 3.75% interest rate for small businesses without credit available elsewhere and 2.75% for private non-profits, with long-term repayments of 30 years. EIDLs over $25,000 require collateral, and the slides list ineligible businesses, approval criteria, the documents needed to apply online at www.sba.gov/disaster, and an initial disbursement of $25K within 5 days. Later slides cover forbearance on existing 7(a), 504 and micro loans and non-monetary help from three local resource partners: the Texas Gulf Coast Small Business Development Centers, SCORE Mentors and the WBEA Women's Business Center.
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U.S. Small Business
Administration
Agenda
1. Disaster Loan Assistance from the US
SBA
for Small Businesses and Non-Profits
2. Non-Financial Assistance
from the US SBA and our Partners
3. Additional Resources
These Slides are available to download at:
www.sba.gov/tx/houston
Economic Injury Disaster Loans (EIDL)
Loans up to $2 million; no payments for 12 months
Small businesses and private non-profits are eligible
May be used for fixed debts, payroll, accounts payable and other bills affected by the disaster
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
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Additional EIDL Details
• No cost to apply
• No obligation to take the loan (if offered)
• Amount should reflect 6 months operating expenses
• Existing SBA loans are OK:
• Applicant can have an existing SBA Disaster Loan and still qualify
• Applicant can have other existing SBA Loan (7a, 504, etc) and still qualify
• Loans cannot be consolidated
• Collateral:
• If over $25,000 EIDLs require collateral
• SBA will not decline for lack of collateral, but requires the pledge of what is
available
• Real estate when available
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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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Criteria for Approval
• Credit History - acceptable to SBA.
• Repayment - business must exhibit the ability to
repay the loan. Were you current on your
obligations as of Jan 31?
• Eligibility - business must be located in a declared
state and suffered working capital losses due to
the declared disaster.
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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
• The website for applying for EIDL is www.sba.gov/disaster
• 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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What You Need to Apply
• In addition to the loan application:
• Completed IRS Form 4506-Ts:
• owner
• each principal that owns 20% or more
• each general partner or managing member
• each owner who owns more than 50% of an affiliate business
• At least two (2) years complete business tax returns with all schedules
• UNLESS the loan is for under $500,000. In that case only 4506T is needed
• If you haven’t been in business two (2) years; OK. Submit what you have.
• Personal Financial Statement for each applicant
• Schedule of Liabilities for all fixed debts
• Other information that may be requested:
• A current year-to-date profit-and-loss statement, especially if the most recent Federal tax
return has not been filed
• SBA Form 1368 providing monthly sales figures
8
The Three Step Disaster Loan Process
Apply online per previous slide
Loan Processing Decision
• Information is verified and credit checked
• Forecasts are completed to determine the EIDL amount
• A loan officer contacts you to make recommendation and discuss next steps
• Decision normally takes up to 4 weeks
Loan Closes and Funds Disbursed
• Sign and Submit Loan Documents
• Initial disbursement of $25K within 5 days
• A Case Manager is 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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Forbearance of Your Existing SBA Loan
7(a) Loans and Micro Loans 504 Loans
• Lenders may help with temporary cash • CDCs may help with temporary cash
flow issues by deferring payments flow issues by deferring payments
• For 7(a) loans, up to six (6) consecutive • Up to six (6) consecutive months or 20%
months of the original loan amount, whichever
• Unless guarantee has been sold, in is less
which case 90 days
• For micro loans, up to six (6) consecutive
months
• Deferment may not cause the loan to
extend beyond the maximum six (6) year
maturity
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Important Non-Monetary Assistance from SBA
SBA has three local Resource Partners
• Texas Gulf Coast Small Business Development Centers (SBDC)
• SCORE Mentors
• The WBEA 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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Additional Info / Resources
• SBA YouTube Channel disaster video;
https://www.youtube.com/watch?v=Xm_ss5QmBAE
• One current non-SBA YouTube video is by Gener8tor, specifically for COVID-19
• NOTE: There are many other videos on disaster applications, but all are not from the
SBA. Beware!
• JP Morgan Chase and Regions Bank programs
• Texas Restaurant Association Grant Program
• Galveston EDP Short-term Loan Program: https://bit.ly/2UrL001
• Your existing bank may do bridge loan
• More coming…
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Contact Information
Small Business Development Center Houston SCORE
713-752-8444 713-487-6565
www.sbdc.uh.edu www.houston.score.org
Women’s Business Center U.S. Small Business Administration
713-681-9232 713-773-6500
www.wbea-texas.org/womens-
business-center SIGN-UP FOR EMAIL UPDATES:
www.sba.gov/tx/houston
FOLLOW US ON TWITTER:
@SBA_Houston
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- Original
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