Disaster Loan Assistance from the US SBA for Small Businesses and Non-Profits (SBA file date: March 23 2020 ver 2)
Summary
This SBA slide deck from the Houston office on disaster loan help for small businesses and non-profits describes COVID-19 Economic Injury Disaster Loans of up to $2 million, with no payments for 12 months, 3.75% interest for small businesses without credit available elsewhere, 2.75% for private non-profits and 30-year repayment. It lists what applicants need: IRS Form 4506-T for each principal owning 20% or more, two years of business tax returns unless the loan is under $500,000, a personal financial statement and a schedule of liabilities. A decision normally takes up to 4 weeks, followed by an initial disbursement of $25K within 5 days; denied applicants get up to six months to request reconsideration. It also covers deferrals on existing SBA loans and help from SBDC, SCORE and WBC partners, and warns that many disaster-application videos are not from the SBA.
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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
3
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.
6
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
7
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
9
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
10
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
11
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
12
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 Ass’n 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 US Small Business Administration
713 681 9232 713 773 6500
www.wbea-texas.org/womens- www.sba.gov/tx/houston
business-center
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File and source
- File
- COVID_19_webinar_March_23_2020_ver_2.pdf
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- SHA-256
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- Original
- www.sba.gov