March 17, 2020
SBA Disaster Loans for Business
$50 Billion in SBA loans made available
SBA disaster loans are low-interest federal disaster loans. These loans may be made to pay fixed debts, payroll, accounts payable, and other bills that can’t be made due to the Coronavirus impact. Applications can be completed online directly at the SBA website, or via postal mail. More info can be found at:
UPDATE: Pennsylvania businesses are now eligible to apply for SBA Disaster Loans.
With COVID-19 affecting every state, the SBA Disaster Loan Assistance is extremely important to our clients. Especially with businesses having to shut down now. We are unsure how long this will last.
It is a high priority to share information with business owners about this SBA Disaster Loan Assistance and their cash flow for the coming weeks. We have a team in place to assist with the information. We are glad to step in to assist business owners to obtain cash flow for their business.
Economic Injury Disaster Loan (EIDL)
The SBA Disaster Loan Assistance – Economic Injury Disaster Loan (EIDL) that is structured to provide small businesses who are experiencing ‘substantial economic injury’ the necessary working capital to help survive until normal operations resume after a disaster. Substantial economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operations expenses.
The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Your loan amount will be based on your actual economic injury and your company’s financial needs, regardless of whether the business suffered any property damage. The interest rate on EIDL will not exceed 4% per year. The term of these loans will not exceed 30 years. The repayment term will be determined by your ability to repay the loan.
According to Dr. Kelly Hunt district director for the U.S. Small Business Administration (SBA) Pittsburgh District Office, you can expect a decision to be made on your loan application within 21 days. Disbursements will be most likely be made in 4-5 weeks from application submission. The interest rates of EIDLs are 3.75% for For-Profit companies and 2.75% for Non-profit organizations. Applicants are encouraged to request the most money as possible even if you don’t think you will need it. You can always refuse future disbursements from the SBA.
SBA 3-Step Loan Process
Step 1: Apply for the Loan: Apply: 1) online; 2) in-person at a disaster center, or 3) by mail. As a small business, small agricultural cooperative, small business engaged in aquaculture, or private non-profit organization you may borrow up to $2 million for Economic Injury.
Step 2: Property Verified and Loan Processing Decision Made: SA loan officer works with you to provide all the necessary information needed to reach a loan determination. The loan officer’s goal is to arrive at a decision on your application within 2 – 3 weeks.
Step 3: Loan Closed and Funds Disbursed: A case manager will be assigned to work with
you to help you meet all loan conditions. They will also schedule subsequent disbursements
until you receive the full loan amount.
We Can Help
Wilke has a team in place to help assist with this application. This requires business and personal financial information. Please contact us if you would like us to proceed with assisting with the completion of the EIDL application.
Written by Danielle Duncan
Danielle Duncan is a General Ledger Manager at Wilke & Associates and has a strong background in QuickBooks, payroll, 401(k), and health insurance enrollment.