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You are here: Home / COVID-19 / SBA Economic Injury Disaster Loan

SBA Economic Injury Disaster Loan

March 30, 2020 By New York Truckstop Leave a Comment

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As businesses deal with the economic fallout of Covid-19, The US Small Business Administration (SBA) is working overtime to provide Economic Injury Disaster Loans (EIDL):

  • Loans Up to $2 million
  • No payments for 12 months
  • Small business and private non-for-profits are eligible
  • May be used for fixed debts, payroll, accounts payable, and other affected bills
  • 75% interest rate for small businesses without credit available elsewhere; available elsewhere are not eligible
  • 75% for private non-profits
  • Long-term repayments for Covid-19 crises will be 30 years
  • No cost to apply
  • No obligation to take the loan (if offered)
  • The amount should reflect 6 months operating expenses (if you decide not to take the loan you have 6 months to change your mind)
  • Existing SBA loans are ok:
    • An applicant can have an existing SBA Disaster Loan and still qualify
    • An applicant can have other existing SBA Loan (7a, 504, etc.) and still qualify
    • Loans CANNOT be consolidated
  • Collateral:
    • Required if over $25,000
    • SBA will not decline for lack of collateral but requires the pledge of what is available
    • Real estate when available

What businesses or not-for-profits are ineligible?

  • Any business where gambling is more than 1/3 of annual gross
  • Casinos & racetracks where their purpose for being is gambling
  • Businesses of a “prurient” sexual nature
  • Pawnshops if more than half of their income derives from interest
  • Religious organizations
  • Investment or lending companies
  • Charitable organizations (private non-profits are ok)
  • All speculative activities
  • Agriculture enterprises (New York State has specific loans for agriculture)

What are the criteria for approval?

  • Credit history acceptable to SBA
  • Businesses must exhibit the ability to repay the loan. Were obligations current as of January 31st?
  • Businesses must be located in a declared state and suffered working capital losses due to the Covid-19 disaster.

How to apply:

  • Go to https://disasterloan.sba.gov/apply-for-disaster-loan/index.html and follow instructions
  • Or, download and complete all forms and mail them to:

US Small Business Administration

Processing and Disbursement Center

14925 Kingsport Rd.

Ft. Worth, TX 76155

  • Clear browser cache before applying online
  • Customer service can be reached at:
    • 800-659-2955
    • disastercustomerservice@sba.gov
    • TTY: 800-877-8339

Please note:

  • On all forms “damaged property” refers simply to your primary location for the operations of the business.
  • On form 5 skip box 15, as this only applies to property damage loans.
  • There is no specific location to input a requested loan amount. The loan amount is determined by the supporting documents and any other relevant financial information provided that substitutes economic injury
  • All owners with 20% or greater ownership in the business must be included in the application.
  • After submitting a form you MAY be asked for:
    • Completed IRS form 4506-Ts:
      • Owner
      • Each principal that owns 20% or more
      • Each general partner or managing member
      • Each owner that owns over 50% of an affiliated business
    • Up to two years complete business tax returns with all schedules
    • Personal financial statements
    • Monthly sales figures (SBA form 1368)
    • A current year to date profit and loss statement
  • Complete and submit everything required because delays occur due to missing or incomplete information
  • If more funds are needed you can submit supporting documents and request an increase. If fewer 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

Forbearance on existing SBA loan:

  • 7(a) loans and microloans
    • Lenders may help with temporary cash flow issues by deferring payments up to six consecutive months (unless guarantee has been sold, in which case ninety days)
    • For microloans, up to six consecutive months
    • Deferments may not cause the loan to extend beyond the maximum six-year maturity
  • 504 loans
    • CDCs may help with temporary cash flow issues by deferring payments
    • Up to six consecutive months or 20% of the original loan amount, whichever is less

There is local assistance if needed at www.nysbdc.org for all Small Business Development Centers in New York.

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Filed Under: COVID-19 Tagged With: COVID-19, Economic Injury Disaster Loans, Small Business Administration

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