SBA assistance for Small Businesses and private Non-Profits (SBA file date: 20200408)
Summary
This U.S. Small Business Administration slide deck from the San Antonio District Office explains COVID-19 relief under the CARES Act, signed into law Friday, March 27, 2020. Economic Injury Disaster Loans run up to $2 million at 3.75% for small businesses and 2.75% for private non-profits, with no payments for 12 months and 30-year repayment, and an EIDL advance of up to $10,000 will not have to be repaid. The deck lists ineligible businesses, SBA Express Bridge Loans of up to $25,000, and SBA payment of principal and interest on current 7(a) loans for 6 months. Paycheck Protection Program loans, available from lenders starting April 3, 2020, carry an interest rate of 1% and a maturity of 2 years, with a maximum of the lesser of $10 million or a payroll-based amount, and are forgiven if the funds go to payroll, mortgage interest, rent and utilities.
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U.S. Small Business
Administration
Follow us on Twitter! @SBA_SanAntonio
www.sba.gov/tx/sanantonio
Agenda
1. SBA assistance for Small Businesses and private Non-Profits
2. Resource Assistance from the SBA and our Partners
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
• 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
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 from 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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Preparing for 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 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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EIDL - 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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SBA Express Bridge Loans
Designed to supplement the Agency's Direct disaster loan capabilities
• If a small business has an urgent need for cash while waiting for decision and
disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express
Disaster Bridge Loan.
• 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
• Will be repaid in full or in part by proceeds from the EIDL loan 19
www.sba.gov/tx/sanantonio
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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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Deferments of Your Existing SBA Loan
7(a) Loans and Micro
504 Loans Existing Disaster Loans
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 • The deferment will NOT
cause the loan to extend cancel any established
beyond the maximum Preauthorized Debit
seven (7) year maturit (PAD) or recurring
payments on your loan.
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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 can apply with a lender starting
April 3, 2020
• 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.
• All employees are kept on the payroll for eight weeks
• at least 75% of the forgiven amount must have been used for payroll
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Paycheck Protection Program
• Any eligible small businesses including:
• non-profits
• Veterans organizations A tax-exempt nonprofit organization
described in section 501(c)(3) of the
• Tribal concerns Internal Revenue Code (IRC), a tax-
exempt veterans organization
• sole proprietorships described in section 501(c)(19) of the
• self-employed individuals IRC, Tribal business concern described
in section 31(b)(2)(C) of the Small
• independent contractors Business Act
• 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 1% • No collateral
• Maturity of 2 years • No personal guarantees
• First payment deferred for six • No borrower or lender fees
months payable to SBA
• 100% guarantee by SBA
• Forms Needed
• SBA Form 2483 (PPP Application)
• Payroll documentation
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Paycheck Protection Program
https://www.sba.gov/sites/default/files/2020-04/PPP%20Borrower%20Application%20Form.pdf
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Paycheck Protection Program
How much can I borrow Example –
• The maximum loan amount is • No employees make more than
the lesser of $10 million or an $100,000
amount that you will calculate • Annual payroll: $120,000
using a payroll-based formula
specified in the Act • Average monthly payroll:
$10,000
• Multiply by 2.5 = $25,000
• Maximum loan amount is
$25,000
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Paycheck Protection Program
• Only one PPP loan to eligible borrower.
• Forgiveness will be reduced if full-time headcount declines, or if
salaries and wages decrease.
• Independent contractors do not count as employees for purposes of
PPP loan forgiveness.
• Independent contractors has the ability to apply for a PPP loan on their
own
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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 210.458.2460 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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