SBA Government Disaster Assistance

SBA (Small Business Administration) Government Disaster Assistance

UPDATED ON 3/26/2020

Important Note: Funding will be provided via the SBA Disaster Direct Lending Program - BANKS will not be involved in this specific program.

Key Points:

- Once a declaration is made for designated areas within a state, the information on the application process for “The Economic Injury Disaster Loan” assistance program will be made available to all affected communities.

- Funding will be available to non-profits as well.

- It is anticipated that funding will be earmarked as operating capital to cover debt payment, A/P, payroll, etc. Please note that the official title is "The Economic Injury Disaster Loan Program.”

Here are some of the details:

1. SBA is the DIRECT lender. BANKS are NOT involved in this specific program. Applications will go directly to the SBA.

2. ALL states have been approved for this program.

3. Loan amounts available - up to TWO million dollars.

4. Rates - 3.75% for small businesses, 2.75% for non-profits

5. Terms of the loans are up to 30 years, in order to spread out payments.

6. Credit checks will be more flexible and any issues will be discussed directly with each applicant.

7. There will be a one-year payment deferment from the approval date of the loan. (In other words, a one-year grace period is provided.)

8. Payments on any existing SBA loans may be delayed until the end of 2020, starting with the March 2020 payment.

9. The purpose of the disaster loan is for operational expenses and working capital (payroll, operating expenses, accounts payable, lease payments. etc.). It is NOT for lost profits or projected profits.

10. Eligible businesses are: small businesses, new businesses established in 2019 (need P&L and PFS), franchises, non-profits and tax exempt businesses.

11. Not eligible are some religious organizations and the cannabis industry.

12. When applying on line, a 4506-T transcript will be needed. Also, have financial information available and be prepared to explain business loss (drop in sales, revenue drop, projected losses, contracts cancelled, etc.).

13. A one-page industry certification for your industry will have to be completed. It is needed to determine eligibility.

14. Check the box on the application marked “economic injury” - NOT “physical damage.”

15. There is NO prepayment penalty with this program.

16. 2019 business returns need not be filed in order to apply.

17. If loan is approved, you have the option to wait up to 60 days to accept. This will provide time to review any potential better deals from stimulus packages pending.

18. Always apply for this loan regardless of whether you think you are eligible or not - and even if you don’t have all of the financial information available.

19. Keep in mind - this is a LOAN program, NOT a GRANT.

*Please contact our financial consultant Dennis Dovie with questions or assistance with the application process. He can be reached at dennis@paddencooper.com

Start applying on online and then you can follow up with phone calls.

Link to SBA information: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

More Information:

- SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339)

- e-mail disastercustomerservice@sba.gov

- Go to: www.paddencooper.com/blog/

Dennis Dovie | 03/26/2020

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SBA Government Disaster Assistance