COVID Resources

SBA Coronavirus Disease (COVID-19) Relief Loans

The Coronavirus has significantly impacted many of our clients. The SBA is making available Disaster Relief Loans to help businesses to get through this event. Here is a summary of available information:

  1. SBA Coronavirus Disaster Relief Loans are now available in Alabama and most neighboring states. The current plan is for the program to be administered directly by the SBA. It is likely they will not be able to handle the volume and local banks may become involved. Submit as soon as possible and get in the queue. Applications can be completed online or mailed to the address on the application.
  2. The low rates and extended amortization make for very low-cost loans to help you to get through these unpreceded times. The process will take a little work but should be worth it. For many business, bank financing will not be an option.
  3. Loans are for working capital and not to expand or refinance existing debt. They may be used to pay fixed debts, payroll, rent, accounts payable and other bills that cannot be paid because of the disaster’s impact. (When requesting a loan amount break out items like 6 months of payroll, loan payments, inventory, etc.) We recommend putting together a spreadsheet showing how much each of these items comprise to justify loan needs.  
  4. Loans of up to $2 million
  5. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
  6. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
  7. They are available to for profit and non-profits (Typically SBA loans are only available to for-profit companies, but they have made an exeception)
  8. They are administered directly through the SBA and not your local bank.
  9. On a case by case basis, loans offered under this program may have a forgiveness clause as a feature
  10. We HIGHLY recommend you fill out the forms completely. Take your time and make sure all sections are filled out properly – this will speed up the process. Rushing these forms will likely cause significantly more delays.

Here is a link to the website to apply:
https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-21
 
Here is a link to see if a state or county qualifies :
https://www.sba.gov/disaster-assistance/coronavirus-covid-19

Required Documentation
The following documents are required for Loan Processing to reach a loan decision:

Business Loans

· Business Loan Application (SBA Form 5) completed and signed by business applicant.

· IRS Form 8821/4506-T completed and signed by applicant business, each principal owning 20 percent or more of the applicant business, each general partner or managing member, and, for any owner who has a 50 percent or more ownership in an affiliate business. (Affiliates include, but are not limited to, business parents, subsidiaries, and/or businesses with common ownership or management.)

· Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; or an explanation if not available.

· Personal Financial Statement (SBA Form 413 may be used) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20 percent or more of the applicant business and each general partner or managing member.

· Schedule of liabilities listing all fixed debts (SBA Form 2202 may be used).

Additional Information That May Be Necessary To Process Your Application:

· Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20 percent or more of the applicant business, each general partner or managing member, and each affiliate.

· 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.

The SBA is extremely particular pertaining to paperwork and their rules. You will need to show a concrete material impact due to the Coronavirus and make sure that all SBA paperwork is filled out completely.