Alloy Silverstein presents a guide for small businesses experiencing hardship and losses during COVID-19. Now that New Jersey is a declared disaster state, this Small Business Administration (SBA) financing is available to New Jersey small businesses (fewer than 500 employees).
Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19).
An SBA EIDL is low-interest, long-term disaster loan offered as an affordable and fast financing option for individualsand businesses to recover from declared disasters. The purpose during the COVID-19 pandemic is to provide vital economic support to help small businesses overcome temporary loss of revenue.
The loan is available to businesses of all sizes and non-profit organizationsto pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. It is also for homeowners and renters to repair or replace uninsured/underinsured disaster damaged property.
EIDLs offer up to $2 million in assistance that can be paid back up to a maximum of 30 years (determined on a case-by-case basis). The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The non-profit interest rate is 2.75%. Note that the SBA is deferring payments for 12 months.
See our above infographic for the steps on applying. Visit disasterloan.sba.gov to get started.
• Business Loan Application (SBA Form 5) completed and signed by business applicant.
• Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
• IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
• Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
• Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
• 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 is acceptable.
• Current year-to-date profit and loss statement.
• Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.
• Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
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We are here to help! This process can be one less burden for you with the right partner on your side. Ask your accountant and advisor for assistance.
[Source: Small Business Administration]
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