Economic Injury Disaster Loans Information purpose only This product is offered by the U.S. SBA and not Banks

Coronavirus (COVID-19)

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Economic Injury Disaster Loans (EIDLs)

Small businesses may be eligible for EIDLs if suffered substantial ‘economic injury’.

Substantial economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses.

EIDLs provide the necessary working capital until normal operations resume.

Apply directly to SBA’s Disaster Assistance Program: DisasterLoan.sba.gov

No cost to apply

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Eligible Businesses

Businesses directly affected by the disaster:

❑ Small businesses

❑ Small agricultural cooperatives

❑ Small aquaculture businesses

❑ Most private non-profit organization

Businesses that offer services directly related to the business targeted in the declaration

Applicants must have a credit history acceptable to SBA – Must show ability to repay all loans

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Eligible Businesses - Location

Business must have a physical presence in the disaster area: DisasterLoan.Sba.gov/ela/Declarations/Index

Business’s economic presence alone in disaster area does not meet this requirement

Physical presence must be tangible and significant

P.O. Box in disaster area does not meet this requirement

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Eligible Businesses – Business Activity

Primary Activity – Primary industry of the business and affiliated entities must be an eligible activity

Loss Activity – The activity for which the loss is being claimed must be eligible.

Eligible industry includes but not limited to following: manufacturers, retailers, wholesalers, service providers, auto repair, carwash, gas stations, dry cleaners, liquor stores, etc.

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Eligible Businesses – Size

Size of the business must not exceed the size standard for the industry

Size of the business and affiliate entities must not exceed the size standard for either the primary activity of the business along or the primary industry of the affiliate entity, whichever is higher

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Eligible Businesses – Independently Owned

Free from significant control – Business must be free from significant control by other concerns

Effect of IRS guidelines – Merely filing a Schedule C does not qualify an individual as a business

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Ineligible Businesses

❑ Religious Organizations

❑ Charitable Organizations

❑ Consumer and Marketing Cooperatives

❑ Gambling Concerns (More than 1/3 of revenue)

❑ Casinos & Racetracks

❑ Marijuana-related Concerns

❑ Lending or Investment Concerns

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Ineligible Businesses – cont.

❑ Speculative Activities

❑ Pawn Shops (More than 1/2 of revenue from interest)

❑ Real Estate Developer

❑ Pyramid

❑ Concerns with principals incarcerated, on parole or probation

❑ Government Owned Entities

❑ Political or Lobbying Concerns

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Ineligible Businesses – cont.

❑ Concerns Engaged in Prurient Sexual Nature

❑ Concerns Not in Disaster Area

❑ Concerns with Credit Available Elsewhere

❑ Change of Ownership after the Economic Injury

❑ Concerns Established Post-Disaster – Business should have been in existence prior to 01/31/20

❑ Applicants who have not complied with terms of p rev iou s SBA Loans ( i nc lud ing i n su rance requirements)

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Eligible Use of Loan Proceeds

Helps meet working capital needs caused by the disaster including:

❑ Fixed Debt Payments including Bank Loans (Not SBA Loans)

❑ Payroll

❑ Accounts Payable

❑ Extraordinary Expenses caused by the Disaster

❑ EIDLs do not replace lost revenue, lost profits or fund expansion.

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Ineligible Use of Loan Proceeds

❑ Refinancing Long Term Debt

❑ Paying Down existing Loan (Other than regular installment payment)

❑ Loan payment of Federal Debt (Including SBA Loans)

❑ If existing federal debt is delinquent, SBA must have written documentation from appropriate Federal Agency explaining how the delinquency will be cured.

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Terms & Condition

❑ Loan amounts and terms are determined by US SBA based on the financial condition.

❑ Loan amount is limited to $2,000,000

❑ Interest rates are 3.75% for small businesses and 2.75% for nonprofit organizations

❑ Term is up to 30 years

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Collaterals

❑ Loan amount over $25,000 require collateral(s)

❑ SBA will take real estate collateral if available

❑ SBA will not decline a loan for lack of collateral but will require what is available

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Documents Checklist

❑ Completed Application (SBA Form 5)

❑ IRS Form 4506-T for Business, Individual, and Affiliates

❑ Complete Copy of Federal Tax Returns

❑ Personal Financial Statement (SBA Form 413)

❑ Schedule of Liabilities (SBA Form 2202)

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Additional Financial Information

❑ Federal Tax Return of the Business

❑ Federal Tax Return of Individuals with more than 20% ownership

❑ Federal Tax Return of Affiliate Entities

❑ If Tax Return has not been filed, Year-end Business Financial Statement of 2019

❑ Profit & Loss Statement of 2020

❑ SBA Form 1368 – Providing monthly sales figures

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Notes

❑ Everyone Should Try to Apply (Recommended by SBA)

❑ SBA Officer may ask for additional information to confirm revenue loss from the Disaster

❑ Landlords, Strip Malls, Tenants may be eligible

❑ Applicants with ‘maxed-out’ SBA are still eligible

❑ SBA hotline is available with multiple languages

❑ Every Applicant has own unique circumstances; therefore, the process and decision by US SBA will be dependent upon their own information

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How to Apply

Applicants may apply online using Electronic Loan Application: DisasterLoan.sba.gov/ela

Normally take 35~45 days after complete application

Paper Loan Application can be downloaded from www.sba.gov/disaster and mailed to: U.S. Small Business Administration Processing and Disbursement Center 14925 Kingsport Road., Fort Worth, TX 76155

Disaster Loan Information may be obtained from Customer Service Center at 800-659-2955 or disastercustomerservice@sba.gov

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Disaster Loan Application Portal

https://disasterloan.sba.gov/ela/

DOUBLE-CLICK ON THE LINK TO ACCESS THE SITE

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Register

From this page you can:

1) Begin a new application by clicking on Register

2) Return to complete a started application by inputting a user name and password

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Complete Registration Information

On page 1 of the registration, pay close attention to the sections with an * these sections must be completed. It is important that a good email address and cell phone number are supplied.

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Complete Registration Information – cont.

On page 2 of the registration you will create your unique user-name and password. When creating your security questions, make sure to use information you won’t likely forget. If your password ever requires a reset, you would need this information

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Business Type

SBA Form 5 would be completed by: • Corporations • Partnership • Private Non-Profit Organizations • Limited Partnership • Trust • Limited Liability Entity

SBA Form 5C would be completed by: Sole Proprietorship

Once you make your selection the system will automatically direct you to the form.

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Select State, County, Disaster Declaration

Use the drop-down box and select the State and County where the

loss has happened

Select the disaster declaration

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Complete Certification

Read and Electronically Agree to the Certification of Truthful

Information and the Executive Orders Document.

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Start Application – Form 5

This business type for this example is an LLC.

This page provides information on all the

filing requirements necessary to have a

successfully completed application.

To begin depress START

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Start Application – Form 5 Page 1

Fill in the information on this page as necessary, items with a red * are mandatory field and you will not be able to advance to NEXT until these sections are completed.

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Start Application – Form 5 Page 2 & 3

Page 2 of Form 5 allows the business owner to provide information about any Partners or Affiliate Businesses.

Note: If a business is a partnership all members must listed with the % of ownership until the combined entries equal 100%

Page 3 is used for any relevant comments

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Filing Requirements

Now that the application is complete, the filing requirements on this page must be submitted / uploaded to complete the process.

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Personal Financial Statement

You can use this form to complete your personal financial statement or upload a financial statement you already have by scanning and uploading that document

If you indicated you have real estate you must complete this

form, supplying additional information

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Personal Assets / Debts

The applicant and any partner would need to provide information on assets and debits

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Schedule of Liabilities – SBA Form 2202

Applicant would click on Schedule of Liabilities and either complete the SBA form or upload the

applicant’s document32

Upload 4506-T The 4506T can be uploaded once the form is printed and signed. You would need to save a copy on your desktop, once saved browse find the document and upload.

You could also opt to deliver offline

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Upload Tax Returns

To complete your application you must upload your most recent tax returns.

Taxes would be scanned and saved on the desktop. You would browse your desktop and then upload the tax returns.

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Certificate as to Truthful Information

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Filing Requirements Complete

You can see that all filing requirements no longer say “start” what shows now is all filing requirements have been updated and the application is ready to submit

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Application Successfully Submitted

Once the application is successfully submitted you will get this page. In the right hand corner a message indicator will appear. The message confirms submittal of the application

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Return to Completed Application

Input your user-name and password to complete a started application, once in

click on “Continue”

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Completing Form 5C – Sole Proprietor

Fill in the information blocks and then hit next. Fields marked with a red asterisk is a required field.

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Application Status

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