This is the 3rd in a series of updates on resources to help manage your business or nonprofit organization in the shadow of the COVID-19 global pandemic. This update provides a quick overview of the SBA Economic Injury Disaster Loans.
Avisen has extensive experience with these kinds of SBA loans. Please call or email to get assistance in determining if the SBA loan is right for you – and for help completing a loan application.
For easy reference, previous updates:
Government powers in a Peacetime Emergency and what they mean for your business, and
COVID-19 Workplace and Employment issues guide, by my colleague Bill Egan.
Note that the information provided here is current as of Friday morning, March 27; Congress has not yet enacted the proposed additional help in the “CARES Act.” Avisen believes it is wise for applicants to continue moving forward with SBA emergency loan applications; we expect SBA will continue to process loan applications even as the program is adjusted by Congress.
First, here you can find the slides from a recent webinar held by the Minnesota District Office of the US Small Business Administration on these emergency loans.
The SBA Economic Disaster Loans are intended to be low-interest loans for working capital for small businesses and nonprofit organizations that have suffered a “substantial” economic injury due to the COVID-19 global pandemic.
These loans can be as large as $2,000,000, depending on the needs of the business and the extent of the economic injury. Some collateral or personal pledge will be required over $25,000; loans below this threshold may be unsecured without any collateral. The loan term can be as long as 30 years, at 3.75% for businesses, and 2.75% for nonprofit organizations. There is no penalty for prepayment, and first payments will be deferred 12 months.
Loans can be used to cover lease payments, mortgage payments, other fixed loan payments, payroll and accounts payable.
To apply, you can use the online portal, but it has been in extremely high demand and is quite slow: https://disasterloan.sba.gov/ela.
Avisen recommends that users use the paper loan application option. Below you can find the application and supporting forms required for the application. Once completed and compiled, make copies for yourself, and send the application to:
US SBA Processing and Disbursement Center, 14295 Kingsport Road, Fort Worth, TX 76155.
Please call or email – Avisen’s team of experienced lawyers are here to help you complete these SBA loan applications.
2) US SBA Form 413 – Personal Financial Statement
3) US SBA Form 2202 – Schedule of Liabilities
4) US SBA Form 1368 – Additional Filing Requirements
5) IRS Form 8821 – Tax Information Authorization
6) IRS Form 4506-T – Request for Transcript of Tax Return