SBA To Provide Economic Injury Disaster Loans For Coronavirus Related Economic Disruptions
Summary
This SBA presentation on Economic Injury Disaster Loans for coronavirus-related economic disruptions sets out who may apply and how. Applicants must have an acceptable credit history, show the ability to repay, and have a physical presence in a declared county, since economic presence or a P.O. Box alone does not qualify. Agricultural enterprises, religious organizations, charitable organizations, gambling concerns and casinos are listed as ineligible, while hotels, restaurants, retailers, travel agencies and owners of rental property are given as eligible examples. Loans run up to $2 million, the maximum unsecured amount is $25,000, and a denied applicant has up to six months to request reconsideration in writing. Most of the deck walks through the online Disaster Loan Application Portal, including SBA Form 5 or 5C, IRS Form 4506T, SBA Form 413 and SBA Form 2202.
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SBA’s Disaster Declaration Makes Loans
Available Due to the Coronavirus (COVID-19)
The U.S. Small Business Administration (SBA) is
offering designated states and territories low-interest
federal disaster loans for working capital to small
businesses suffering substantial economic injury as a
result of the Coronavirus (COVID-19).
Upon a request received from a state’s or territory’s
Governor, SBA will issue under its own authority, as
provide by the Coronavirus Preparedness and
Response Supplement Appropriations Act that was
Administrator Jovita Carranza
recently signed by the President, an Economic Injury
Disaster Loan declaration.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
SBA’s Economic Injury Disaster Loan Basics
What businesses are eligible to apply?
SBA’s Economic Injury Disaster Loans (or working capital loans)
are available to small businesses, small agricultural cooperatives,
small aquaculture businesses and most private non-profit
organizations
This includes:
• Businesses directly affected by the disaster
• Businesses that offer services directly related to the businesses
in the declaration
• Other businesses indirectly related the industry that are likely to
be harmed by losses in their community
(Example: Manufacturer of widgets may be eligible as well as the
wholesaler and retailer of the product.
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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SBA’s Economic Injury Disaster Loan Basics
What is the criteria for a loan approval?
Credit History-Applicants must have a
credit history acceptable to SBA.
Repayment –SBA must determine that the
applicant business has the ability to repay
the SBA loan.
Eligibility- The applicant business must be
physically located in a declared county and
suffered working capital losses due to the
declared disaster, not due to a downturn in
the economy or other reasons.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
SBA’s Economic Injury Disaster Loan Terms
How much can I borrow?
Eligible entities may qualify for loans up to $2 million.
The interest rates for this disaster are 3.75 percent for small businesses and
2.75 percent for nonprofit organizations with terms up to 30 years.
Eligibility for these working capital loans are based on the size (must be a
small business) and type of business and its financial resources.
How can I use the loan funds?
These working capital loans may be used to pay fixed debts, payroll, accounts
payable, and other bills that could have been paid had the disaster not
occurred. The loans are not intended to replace lost sales or profits or for
expansion.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Economic Injury Disaster Loan Terms
What are the collateral requirements?
• Economic Injury Disaster Loans over $25,000 require
collateral.
• SBA takes real estate as collateral when it is available.
• SBA will not decline a loan for lack of collateral,
but requires borrowers to pledge what is available.
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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SBA’s Economic Injury Disaster Loan Basics
What kinds of small businesses can apply?
Examples of eligible industries include but are not
limited to the following: hotels, recreational facilities,
charter boats, manufactures, sports vendors, owners
of rental property, restaurants, retailers, souvenir
shops, travel agencies, and wholesalers.
What other criteria is involved?
The applicant business must have a physical presence in the declared disaster
area. An applicant’s economic presence alone in a declared area does not meet
this requirement. The physical presence must be tangible and significant. Merely
having a P.O. Box in the disaster area would not qualify as a physical presence.
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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SBA’s Working Capital Loans are Different
from Other SBA Loans
SBA’s Economic Injury Disaster Loan (EIDLs) funds come directly from the
U.S. Treasury.
Applicants do not go through a bank to apply. Instead apply directly to
SBA’s Disaster Assistance Program at: DisasterLoan.sba.gov
There is no cost to apply.
There is no obligation to take the loan if offered.
The maximum unsecured loan amount is $25,000.
Applicants can have an existing SBA Disaster Loan and still qualify for an
EIDL for this disaster, but the loans cannot be consolidated.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Basic Filing Requirements
• Completed SBA loan application (SBA Form 5 or 5C).
• Tax Information Authorization (IRS Form 4506T)
for the applicant, principals and affiliates.
• Complete copies of the most recent Federal Income Tax Return.
• Schedule of Liabilities (SBA Form 2202).
• Personal Financial Statement (SBA Form 413).
Other Information may also be requested.
*Although a paper application and forms are acceptable, filing electronically is
easier, faster and more accurate.
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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Additional Filing Requirements
Other information that may be requested:
• Complete copy, including all schedules, of the most recent Federal income
tax return for principals, general partners or managing member, and
affiliates (see filing requirements for more information).
• If the most recent Federal income tax return has not been filed, a year-end
profit-and-loss statement and balance sheet for that tax year .
• A current year-to-date profit-and-loss statement .
• Additional Filing Requirements (SBA Form 1368) providing monthly sales
figures. (This is especially important for Economic Injury Disaster Loans.)
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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Ineligible Entities
What are some of the businesses that are ineligible for an Economic
Injury Disaster Loan?
• Agricultural Enterprises -If the primary activity of the business (including
its affiliates) is as defined in Section 18(b)(1) of the Small Business Act,
neither the business nor its affiliates are eligible for EIDL assistance.
• Religious Organizations
• Charitable Organizations
• Gambling Concerns (Ex: Concerns that derive more that 1/3 of their
annual gross revenue from legal gambling activities)
• Casinos & Racetracks (Ex: Businesses whose purpose for being is gambling
(e.g., casinos, racetracks, poker parlors, etc.) are not eligible for EIDL
assistance regardless of 1/3 criteria above.
U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
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How to Apply
SBA’s Customer Service Representatives are ready to serve.
• Applicants may apply online using the Electronic Loan Application (ELA) via
SBA’s secure website at https://disasterloan.sba.gov/ela.
• Paper loan applications can be downloaded from www.sba.gov/disaster.
Completed applications should be mailed to: U.S. Small Business
Administration, Processing and Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
• Disaster loan information and application forms may also be obtained by
calling the SBA’s Customer Service Center at 800-659-2955
(800-877-8339 for the deaf and hard-of-hearing) or by sending an email to
disastercustomerservice@sba.gov.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Assistance From SBA Partners
Free assistance with reconstructing financial records, preparing
financial statements and submitting the loan application is available
from any of SBA’s partners: Small Business Development Centers
(SBDCs), SCORE, Women’s Business Centers (WBC), and Veteran’s
Business Outreach Centers and local Chambers of Commerce.
For the nearest office, visit: https://www.sba.gov/local-assistance
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Submit Your Application
As Soon As Possible
Recheck the filing requirements to ensure that all the needed
information is submitted.
The biggest reason for delays in processing is due to missing
information. Make sure to complete all filing requirements before
submitting the application and forms.
If more funds are needed, applicants can submit supporting
documents and a request for an increase. If less funds are needed,
applicants can request a reduction in the loan amount.
If the loan request is denied, the applicant will be given up to six
months in which to provide new information and submit a written
request for reconsideration.
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Any Questions?
More information concerning
SBA and its programs
visit our website at:
www.sba.gov/disaster
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U.S. Small Business -Office of Disaster Assistance-Field Operations Center - East
Disaster Loan Application Portal (DLAP)
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Disaster Loan Application Portal
This presentation will provide guidance on how to complete an
Electronic Business Application utilizing SBA Form 5 and SBA Form
5C. Before starting this process, please insure you have the filing
requirements as defined in this document. These documents are
required for processing and EIDL application.
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Filing Requirements
Electronic Loan Application (Form 5)
Electronic Loan Application (Form 5C) Sole Proprietorship Only
Tax Authorization (Form 4506-T) 20% Owners/GP/50% Affiliate
Most recent Business Tax Return
Personal Financial Statement (Form 413) 20% Owners/GP
Schedule of Liabilities (Form 2202)
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Disaster Loan Application Portal (DLAP)
DOUBLE-CLICK ON THE LINK TO ACCESS
THE SITE
https://disasterloan.sba.gov/ela/
DOUBLE-CLICK APPLY
ONLINE
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Register
From this page
you can:
1) Begin a new
application by
clicking on
Register
2) Return to
complete a
started
application by
inputting a user
name and
password
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Complete Registration Information
On page 1 of the
registration, pay close
attention to the sections
with an * these sections
must be completed. It is
important that a good
email address and cell
phone number are On page 2 of the
supplied. registration you will
create your unique
user-name and
password. When
creating your security
questions, make sure
to use information
you won’t likely
To advance to the next page, go forget. If your
next
password ever
requires a reset, you
would need this 21
information
Apply Online
Double Click on “Apply
Online”
Double Click on Business and
Non Profit
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Business Type
SBA Form 5 would be completed by:
• Corporations
• Partnership
• Private Non-Profit Organizations
• Limited Partnership
• Trust
• Limited Liability Entity
SBA Form 5C would be completed by:
Sole Proprietorship
Once you make your selection the
system will automatically direct you
to the form.
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Select State /County / Disaster Declaration
Use the drop-down box and select the
State and County where the loss has
happened
Select the disaster declaration
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Complete Certifications
Read and Electronically Agree to
the Certification of Truthful
Information and the Executive
Orders Document.
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Start Application – Form 5
This business type for
this example is an LLC.
This page provides
information on all the
filing requirements
necessary to have a
successfully completed
application.
To begin depress
START
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Form 5 – Page 1
Fill in the information
on this page as
necessary, items with
a red * are
mandatory field and
you will not be able
to advance to NEXT
until these sections
are completed.
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Form 5 – Pages 2 and 3
Page 3
Page 2 of Form 5 allows is used
the business owner to for any
provide information relevant
about any Partners or comme
Affiliate Businesses. nts
Note: If a business is a
partnership all members
must listed with the % of
ownership until the
combined entries equal
100%
28
Filing Requirements
Now that the
application is
complete, the
filing
requirements on
this page must
be submitted /
uploaded to
complete the
process.
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Personal Financial Statement
You can use
If you indicated you have real
this form to
estate you must complete this
complete
form, supplying additional
your
information
personal
financial
statement or
upload a
financial
statement
you already
have by
scanning
and
uploading
that
document
30
Personal Assets / Debits
The
applicant
and any
partner
would
need to
provide
informati
on on
assets
and
debits
31
Schedule of Liabilities – SBA form 2202
Applicant would click on Schedule of Liabilities
and either complete the SBA form or upload the
applicant’s document
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Uploaded 4506T
The 4506T
can be
uploaded
once the
form is
printed and
signed. You
would need
to save a
copy on
your
desktop,
once saved
browse find
the
document
and upload.
You could
also opt to
deliver
offline
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Electronically file 4506T
Each Applicant and Partner must submit a 4506T
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4506T Uploaded Successful
Once the 4506 T is uploaded you will
receive a message back indicating the
transmittal was successful. Make
sure all fields are complete. All
partners must submit this form for
their individual and business taxes.
35
Tax Returns
To complete your application you must
upload your most recent tax returns.
Taxes would be
scanned and saved
on the desktop. You
would browse your
desktop and then
upload the tax
returns.
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Certificate as to Truthful Information
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Filing Requirements Complete
You can see that all filing requirements no longer say “start” what shows now is all filing
requirements have been updated and the application is ready to submit
38
Application Successfully Submitted
Once the application is successfully
submitted you will get this page. In the
right hand corner a message indicator
will appear. The message confirms
submittal of the application
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Returning to Complete Application
Input your user-name and password to
complete a started application, once in
click on “Continue”
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Business Losses
A Sole-Proprietor will use
“Sole-Proprietor” and
“Economic Injury (EIDL).
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Home/Personal Losses
The Loan Application will walk you though the
process. Click “Save” to save the input and click
“Next” to navigate to the next page.
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Declaration Selection
On the same line as the
“Save” icon you also can
see the “Progress” of the
Disaster Loan Application.
Enter your “State” and
“County”
43
Certification and Executive Order
Read the “Warning”,
Read the
check “I Certify” then
information, check “I
click “Next”.
have read…” then
click “Next”.
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Filing Requirements
To continue with the
application process click
“Start” to complete SBA
Form 5C.
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Completing Form 5C - Sole Proprietor Loan Application
Fill in the information blocks
and then hit next. Fields
marked with a red asterisk is
a required field.
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Form 5C continued - Damaged Property Information
Fill in the information blocks
and then hit next. Fields
marked with a red asterisk is
a required field.
47
Form 5C continued -Debts and Assets Information
Fill in the information blocks
and then hit next. Fields
marked with a red asterisk is
a required field.
48
Form 5C continued - Disclosure Statements
Fill in the information as
required and then hit next.
Fields marked with a red
asterisk is a required field.
49
Form 5C continued - Consent and Additional Comments
Read the
information, check Additional Comments are used for
“All the clarifying or additional information.
information…” then
click “Next”. Click “Next” to continue the process.
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Form 5C continued - Affiliated Businesses
Fill out the Affiliated
Business information
then click “Save”.
To continue the
process click “Next”.
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Completing IRS Form 4506-T
Once you have
finished the SBA
Form 5C, the tax
transcript
information will need
to be completed.
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Request for Transcript of Tax Return
Form 4506T can be
submitted
electronically, via
upload or offline. If
the eSign option
populates click
through the options
until the document is
successfully
completed. If you
upload the document
you would save it on
your desktop, select
browse and then
upload.
53
Request for Transcript of Tax Return - Download /
Upload
If you chose to deliver a copy this
alert will appear. And you will no
longer be able to upload
information. The document will
have to be submitted offline.
54
Request for Transcript of Tax Return - Download /
Upload
Successfully Uploaded will
Once you have downloaded appear when finished.
your tax returns you can Then click “Next” to continue
upload. the process.
55
Filing Requirements
Once the tax returns are
complete sign the final Truthful
Information Statement.
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Submit Application
Finally you can submit
your application when
the “Submit” icon
appears.
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Application Submission Confirmation
After
submission you
will see that
your
application
number has
been
submitted.
58
Message Center
59
Home Page
After competing
application you
automatically return to
the home page.
From here you can check
the status of your
application by clicking the
“Status” icon.
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Application Status
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Special Note
If you receive a message like the one below, depress “SAVE”
so that you don’t lose your information.
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File and source
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