Brief SBA Loan Outline
This brief outline of 3 SBA loans provided by a Chamber member in our banking community.
COVID-19 ECONOMIC INJURY DISASTER LOAN
https://www.sba.gov/disaster-
- The SBA is providing loans of up to $2MM for those negatively affected by the COVID-19 pandemic.
- These loans are applied for, underwritten and approved by the SBA.
- You can determine your eligibility and apply at: https://covid19relief.sba.gov/
#/ - You can learn more about the terms of the loans at: https://www.sba.gov/disaster-
assistance/coronavirus-covid- 19 - While your preferred banker may wish to help you with these loans – they are not being processed by banks.
COVID-19 ECONOMIC INJURY DISASTER "LOAN" ADVANCE
https://www.sba.gov/disaster-
- The SBA is currently accepting applications for Advance loans for $10,000. "This loan advance will not have to be repaid" (doesn’t sound like a loan but this is quoted in documents). It takes about 10 minutes and will require you to know your tax id number, basic ownership information and your bank account number and routing number.
- The line to apply for this program is the same as the EIDL loan: https://covid19relief.sba.gov/
#/ - This program is also being administered by the SBA, NOT your banker.
The Paycheck Protection Program
https://www.sba.gov/funding-
- This program is designed to provide financing of up to 2.5x the monthly payroll of a company (sole proprietors, LLC, etc).
- Some of the loan proceeds will be forgiven – details can be found on the link above.
- This program WILL be administered by SBA Approved banks.
- While the program was approved by Congress more than a week ago, until today, very little guidance has been provided on what the application will look like, or the process for banks to provide the loans.
- The SBA website now indicates that banks can start taking applications on Friday, April 3. But this is subject to change, and may vary by bank.
- You will likely want to apply for this loan, at a bank where you already do your business. Why? Banks will be required to comply with Know Your Customer Laws, which unless you are an existing client, typically requires you to actually meet a banker (not easy to do these days).
- You will likely be required to fill out a beneficial ownership form. This is to comply with Federal anti-money laundering laws. Must be done for almost all new loans and accounts.
- Keep your payroll and accounting books up to date and PERFECT. This will be key to you obtaining loan forgiveness (if applicable).
- Make sure your LLC or Corp have filed their annual paperwork with the Commonwealth/State.
- Lastly, the SBA processes $5 Billion of lending through its participating banks. This program alone will be $350 Billion. Be prepared, be organized and be patient.