Financial Assistance from the US SBA for Small Businesses and Non-Profits (SBA file date: March 30 2020 version 4)
Summary
A U.S. Small Business Administration slide presentation from its Houston office on help for small businesses and non-profits after the CARES Act was signed into law on Friday, March 27, 2020. It describes deferral of existing SBA loan payments, including disaster loan payments through December 31, 2020, and Economic Injury Disaster Loans of up to $2 million at 3.75% for small businesses and 2.75% for private non-profits, with repayment terms up to 30 years. An EIDL emergency advance of not more than $10,000 does not have to be repaid even if the loan is later denied. The slides say Paycheck Protection Program loans come from existing SBA lenders, about 200 of them in the Houston District, and that SBA policy on the CARES Act was not yet complete. A questions slide states that EIDL loans are not forgiven and that a business may apply for both EIDL and PPP without duplicating benefits.
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U.S. Small Business
Administration
Agenda
1. Non-Monetary Assistance
from the US SBA and our Partners
2. Financial Assistance from the US SBA
for Small Businesses and Non-Profits
3. Additional Resources
These Slides are available to download at:
www.sba.gov/tx/houston
Non-Monetary Assistance
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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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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Financial Assistance
From the US SBA
Forbearance of Your Existing SBA Loan
7(a) Loans and Existing
504 Loans
Micro Loans Disaster Loans
• SBA will defer existing
• For 7(a) loans, up to six loan payments through
(6) consecutive months • Up to six (6) consecutive December 31, 2020
• Unless guarantee has been months or 20% of the automatically.
sold, in which case 90 days original loan amount, • Borrowers of home and
• For micro loans, up to six whichever is less business disaster loans do
(6) consecutive months not have to contact SBA
• Deferment may not cause to request deferment.
the loan to extend beyond
the maximum six (6) year
maturity
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The CARES Act
• Signed into law Friday, March 27, 2020
• SBA policy regarding the CARES Act is not yet complete
• You should read for yourself
• We can not offer legal interpretation of the Act
• We can not comment on portions of the Act unrelated to US SBA
• The complete CARES Act is located here:
• https://www.congress.gov/bill/116th-congress/house-bill/748/text
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The CARES Act
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Changes Since Last Week
Passage of the
Coronavirus Aid, Relief, and Economic Security (CARES) Act
Gives Businesses TWO Choices for Relief
Affected, Eligible
Business?
1 2
Paycheck Economic Injury
Protection Disaster Loan
Program (PPP) (EIDL)
Loan is from Loan is directly
existing SBA from the federal
Lender government (SBA)
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EIDL Loans
Official Statement on SBA website
• Small Business Owners are eligible to apply for EIDL due to COVID-19;
business must have started prior to Jan 31 2020
• The CARES Act provides additional assistance for small business
owners, including the opportunity to receive up to a $10,000 Advance
on an EIDL
• The SBA is updating our system to implement this provision so small
businesses can request an EIDL Advance when they apply for the loan.
This update will be available in the coming days.
• In the interim you can still apply for a full EIDL, but will need to
reapply for the Advance when the system is updated with a
streamlined application.
12
Economic Injury Disaster Loans (EIDL)
Loans up to $2 million; no payments for 12 months
3.75% interest rate for small businesses; 2.75% for private non-profits.
Long-term repayments up to 30 years
Small businesses, Small Ag cooperatives, and private non-profits are eligible
May be used for fixed debts, payroll, accounts payable and other bills affected by the disaster
May be approved solely on the applicant credit score.
Shall not require tax return or tax return transcript for approval.
May also use alternative methods to determine an applicant’s ability to repay.
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Additional EIDL Details
No cost to apply; No obligation to take the loan (if offered)
Amount is determined by SBA from your information
Existing SBA Disaster or Business loans do not make you ineligible
Personal guarantee requirements:
• None if loan is under $200,000
• If over $200,000 then guarantee from all 20% or greater owners
Credit Elsewhere – requirement is waived by CARES Act
Collateral:
• If over $25,000 EIDLs require collateral
• SBA will not decline for lack of collateral, but requires the pledge of what is available
• Does not require primary residence in Texas
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EIDL Emergency Grant
• Until Dec 31, 2020 affected small businesses may request an advance of not
more than $10,000
• Eligibility is determined by self-certification
• under penalty of perjury pursuant to section 1746 of title 28 United States Code
• Payment should occur within 3 days
• Repayment is not required even if subsequently denied a loan
• Advance may be used to any purpose described in section 7(b)(2) of the Small
Business Act (15 U.S.C. 636(b)(2)), including:
• paid sick leave to employees unable to work due to the direct effect of the COVID–19
• payroll to retain employees
• increased costs to obtain materials unavailable due to interrupted supply chains
• rent or mortgage payments
• obligations that cannot be met due to revenue losses
NOTE: An applicant may receive an EIDL Loan and a PPP loan as long as the costs
being paid with each are different (no "double-dipping").
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How to Apply for EIDL
• Works on iPhone with Safari / Chrome on Android
• If PC; works best with Internet Explorer or Microsoft Edge
• For the COVID-19 disaster everything is 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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17
18
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The Form 5
Five pages
Only 2 for you to complete
Remaining 3 are instructions
This is Page 1
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The Form 5
Page 2
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After Applying
Loan Processing Decision
• Information verified; credit checked; you may be asked for more info
• Forecasts completed to determine the EIDL amount
• A loan officer contacts you; makes recommendations
• 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 Manager assigned that will help you with the rest
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Important Final Notes About EIDL Applications
• 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 get six months to provide a written reconsideration request
with new / supplemental information
• If denied a second time, you get 30 days to appeal again
• Please complete and submit everything required
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PPP Loans
PPP Loans Are From Existing SBA Lenders
• Who Are the Houston District SBA
Lenders?
• Apx. 200 SBA Lenders in the
Houston District
• They may be able to advise you as
to the details of the PPP loans
• A list of SBA lenders in the
Houston District can be found at
www.sba.gov/tx/houston under
Coronavirus Resources
25
PPP Loan Programs Are Being Created
• Policy and Programs are being created as fast as we can
• During later webinars we will be able to share more detail
• In the meantime we refer you back to the Act itself for relevant details
• https://www.congress.gov/bill/116th-congress/house-
bill/748/text
• Section 1102 is about the PPP Program; Less than 10 pages
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Non-SBA Additional Info
Additional Info / Resources
• JP Morgan Chase and Regions Bank programs
• Texas Restaurant Association Grant Program
• Galveston EDA Short-term Loan Program: https://bit.ly/2UrL001
• El Campo Chamber is starting a short-term loan program
• Your existing bank may do their own bridge loans
• 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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Common Questions
• Which loan should I apply for EIDL or PPP? While only you as a business
owner makes that decision, we provide a network of local, free resources
to help in your decision process.
• Is the maximum loan amount of 2.5 times avg monthly expense for the
PPP loan? This seems to be what the CARES act states, or $10 Million,
whichever is less.
• Can I apply for both EIDL and PPP? YES; however, you cannot duplicate
benefits received.
• Are EIDL loans forgiven? NO
• I have already submitted my EIDL application can I submit for the payroll
loan? YES, so long as you don’t duplicate benefits included in the EIDL.
• Can I check status of my application online? YES, soon; email or phone
• What banks are offering PPP loans? See current list of SBA lenders at
www.sba/tx/Houston. We do not current know which, if any, are offering
PPP loans
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- Original
- www.sba.gov