The current Pandemic has all of us these days on edge.
Cities and towns across the country are beginning to grapple with the economic impact that mitigating the spread of COVID-19. Small business owners are concerned about cash flow during this time when people are encouraged by public health officials to stay home and when non-essential businesses are encouraged to close in most areas of Pennsylvania.
Small businesses, in particular, are being hit hard. The good news is the Small Business Administration (SBA) is to provide emergency loans to small businesses affected by this disaster. Here is what you need to know.
- Agricultural Enterprises
- Religious Organizations
- Gambling Concerns
- Casinos & Racetracks
- Cannabis Industry
Loan Approval Criteria
- Acceptable Credit History
- Credit Score of 600
- Ability to repay the SBA loan
- Only available to small businesses that are unable to obtain credit elsewhere
How Much You Can Borrow
- Up to $2 million
- $1,000 per employee in advance – no need to pay back (up to $10,000)
- 3.75 percent interest rate for small businesses and 2.75 percent for nonprofit organizations
- 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
- Up to $25,000 without collateral
How The Funds Can Be Used
- To pay fixed debts, payroll, accounts payable, and other bills
- It cannot replace lost sales or profits or for expansion
- It cannot be used to pay down long-term debt
- Completed SBA loan application (SBA Form 5)
- 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)
- Income, balance sheet, and cash flow documents
Other Information That May Be Requested
- 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
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures
How Soon Will Businesses Receive Money
Eligible businesses that submit complete loan packages could receive the money within three (3) weeks. According to SBA, the decision on an application will be completed in 21 days of submission. However, incomplete or inaccurate information and verification of collateral will delay the approval process
Is there still time to apply?
At this moment, there are no more EIDL funds available (as of 5/5/2020). According to the SBA, “SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EDIL)-COVID-19 related assistance program (including EIDL advances) based on available appropriations funding. Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis,” (US SBA). In the event that more funds become available, check the SBA website or give us a call.
To learn about the status of your EIDL application, contact the SBA Office of Disaster Assistance at 800-659-2955. You will be told how long you can expect to wait until a person picks up. Have your EIDL application number ready.