Yes, borrowers of SBA disaster loans are eligible for loan forgiveness. A borrower of an SBA Loan is eligible to have their loan forgiven up to the amount the borrower spent on the items below during the 8-week period starting on the date of loan origination:
The cost of payroll
Interest on the mortgage obligation incurred in the ordinary course of business
Any additional wages paid to your employees who are normally tipped
Loan forgiveness can’t exceed the principle
The loan forgiveness cannot exceed the principal.
The loan forgiveness amount calculated above will get reduced if you reduce the number of employees you have working or if you reduce wages paid to employees by 25% or more.
According to WashingtonPost, “Yes. The act includes loan forgiveness for companies able to keep employees on payroll or continue paying bills throughout the coronavirus crisis.”
The credit score needed for a SBA loan is 620 to 640+. According to Fundera, “Generally speaking, SBA loan credit score minimums typically fall somewhere around 620-640+.”
The credit score needed for a SBA 7(a) Loans is 640+
Yes you are eligible for the SBA disaster loan if you run a small business with less than 500 employees or:
Are a small business that meets the size standard of SBA
Are a 501(c)(3) with less than 500 employees
You are an individual operating as a sole proprietor
You are an individual operating as an independent contractor
You are an individual who’s self-employed who regularly carries on any business or trade
You are a Tribal business concern and meets SBA’s size standard
A 501(c)(19) Veterans Organization that meets the SBA size standard
In addition, some special rules may make you eligible:
If you are in the accommodation and food services sector (NAICS 72),
the 500-employee rule is applied on a per physical location basis
If you are operating as a franchise or receive financial assistance
from an approved Small Business Investment Company the normal
affiliation rules do not apply
Eligibility For SBA Disaster Loan
According to MerchantMaverick, “To be eligible for an Economic Injury Disaster Loan through the SBA, you’ll need to be located in a disaster declared county or a contiguous county. This type of loan is open to private organizations or small business owners who have sustained an economic injury because of the declared disaster.”
Credit Requirements for SBA Disaster Loan
According to SBA, “What are the Credit Requirements? Credit History – Applicants must have a credit history acceptable to SBA. Repayment – Applicants must show the ability to repay all loans. Collateral – Collateral is required for physical loss loans over $10,000 and all EIDL loans over $5,000.”
The credit score needed for a SBA loan is 620 to 640+. According to Fundera, “Generally speaking, SBA loan credit score minimums typically fall somewhere around 620-640+.”
The credit score needed for a SBA 7(a) Loans is 640+
The US Senate, on March 25, 2020, unanimously passed the (CARES) Act of 2020. Ths bill, with more than $2 Trillion in relief and $350 billion for small business, if enacted, would represent the 3rd phase of legislation meant to help companies and families affected by the the recent outbreak.
According to NBCNews, “WASHINGTON — The Senate overwhelmingly passed a massive $2 trillion stimulus package late Wednesday that’s meant to soften the economic blow of the pandemic for American workers and businesses.”
Small businesses will receive direct help via $350 billion for SBA loans that use an expedited process—administered by private financial institutions—to cover payments for rent/mortgage, utilities and payroll. These loans will be converted into grants at the end of the year if used for intended purposes.
According to SBA, “Small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for a long-term, low-interest loan . The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.”
To get qualified for a SBA disaster loan your business must operated within a declared disaster location. Check here for SBA declared disaster zones.
Credit Score
To qualify you will need to pass a credit check. If you do not have good credit, the SBA will consider other factors such as income, rental history, etc.
Ability to Repay
The SBA considers your ability to repay the loan back in full.
Form of Collateral
If you are applying for a loan of more than $25,000, SBA might require collateral to complete your loan process.
SBA Disaster Loan Terms
The information below will give you a quick looks at the terms and rates for the Business Physical Disaster Loan and the Economic Injury Disaster Loan as provided by MerchantMaverick.
Borrowing Amount: $2 million Maximum
Term Lengths:
30 years Maximum if credit isn’t available elsewhere
7 years Maximum if credit is available elsewhere
Interest Rates:
4% Maximum if credit is not available elsewhere
8% Maximum if credit is available elsewhere
Fees:
No fees from the SBA; possible fees from lawyers or outside agencies
The SBA disaster loan provides working capital to applicants that are eligible. For faster loan processing the business applying must have operated for at least one year before the disaster. Eligibility for the loan must consider compensated from other sources to offset the economic injury. Other sources include but aren’t limited to: (1) grants or other reimbursements (including loans) from private organizations or government agencies, and (2) claims for civil liability against other government entities, organizations, or individuals.
Additional Information May Also Be Required
Complete copy, including all schedules, of the most recent Federal income tax return for each principal owning
20 percent or more, each general partner or managing member, and each affiliate when any owner has more than 50 percent ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management
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 for will generally be required when requesting an increase in the amount of economic injury.
Yes you are eligible for the SBA disaster loan if you run a small business with less than 500 employees or:
Are a small business that meets the size standard of SBA
Are a 501(c)(3) with less than 500 employees
You are an individual operating as a sole proprietor
You are an individual operating as an independent contractor
You are an individual who’s self-employed who regularly carries on any business or trade
You are a Tribal business concern and meets SBA’s size standard
A 501(c)(19) Veterans Organization that meets the SBA size standard
In addition, some special rules may make you eligible:
If you are in the accommodation and food services sector (NAICS 72),
the 500-employee rule is applied on a per physical location basis
If you are operating as a franchise or receive financial assistance
from an approved Small Business Investment Company the normal
affiliation rules do not apply
SBA Disaster Loan Assistance
The SBA is offering low-interest disaster loans for businesses of all sizes, homeowners, renters, and non-profit organizations.
According to FEMA, “Interest rates for SBA disaster loans can be as low as 1.813 percent for homeowners and renters, 3.58 percent for businesses and 2.5 percent for private nonprofit organizations, with terms up to 30 years.”
4% Maximum if credit is not available elsewhere
8% Maximum if credit is available elsewhere
Fees:
No fees from the SBA; possible fees from lawyers or outside agencies
SBA Disaster Loan Application
According to SBA’s disaster loan application, “When you apply for an SBA loan, you may use an attorney, accountant, engineer, appraiser or other representative to help prepare and present the application to us.”
According to Divvy, SBA disaster loans can be used for:
Fixed debts
Employees payroll
Outstanding Bills and invoices
Business adaptations (mobile/online options, delivery, etc.)
An SBA disaster loan can be used to cover losses and costs that wouldn’t have occurred except for the quarantines, social distancing, complications, and other necessary measures made by the recent disaster.
According to SBA, “An SBA disaster loan can be used to repair or replace personal property, real estate, equipment and machinery, and inventory and business assets. SBA says, “Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available to small businesses and private, non-profit organizations in designated areas of a state or territory to help alleviate economic injury.”
The credit score needed for a SBA loan is 620 to 640+. According to Fundera, “Generally speaking, SBA loan credit score minimums typically fall somewhere around 620-640+.”
The credit score needed for a SBA 7(a) Loans is 640+
Yes, borrowers of SBA disaster loans are eligible for loan forgiveness. A borrower of an SBA Loan is eligible to have their loan forgiven up to the amount the borrower spent on the items below during the 8-week period starting on the date of loan origination:
The cost of payroll
Interest on the mortgage obligation incurred in the ordinary course of business
Any additional wages paid to your employees who are normally tipped
Loan forgiveness can’t exceed the principle
The loan forgiveness cannot exceed the principal.
The loan forgiveness amount calculated above will get reduced if you reduce the number of employees you have working or if you reduce wages paid to employees by 25% or more.
Stimulus Package Help for Small Business
According to MarketWatch, “Small businesses will have access to $350 billion in forgivable loans, but they have to meet certain requirements.”
Need Help Filling Out Paperwork to Make Sure You Get The Money?
Why Reinvent the wheel? The licensed attorneys at Canterbury Law Group have already perfected the means by which your company can timely obtain your share of the federal rescue dollars. Time is money, and by hiring Canterbury Law Group, you assure your application will be done on time, and correctly.
Contact Canterbury Law Group today to get help processing your application correctly. [email protected] or 480-744-7711
Will I Get Money From the Government Stimulus Check?
Will I get money from the Bail-Out/Stimulus Bill? Right now, Democrats and Republicans are battling over the specific provisions of the Stimulus Plan. President Trump proposed a plan that would provide $250 Billion in Direct Payments to Americans. The debate centers on the timing of payments and whether the payments should be a set amount or be flexible based on circumstances. Learn more about the Government Stimulus Check.
Wondering what the SBA disaster loan requirements are for the coronavirus?
SBA disaster loan requirements include:
According to DistasterLoanAssistance page on SBA, “After a Presidential disaster declaration, you must first register with the Federal Emergency Management Agency (FEMA). To obtain a registration number, call FEMA at 1-800-621-3362 (TTY: 1-800-462-7585) or visit DisasterAssistance.gov.”
SBA Disaster Loan Requirements
Contact info for everyone on the application
Social security number of everyone on application
Registration number (FEMA)
Lease or deed information
Insurance info
Financial info (e.g. account balances, income, monthly expenses)
EIN (Employer Identification Number) for business applicants
According to SBA, “Small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for a long-term, low-interest loan due to Coronavirus (COVID-19). The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.”
Declared Distaster Location
To get qualified for a SBA disaster loan your business must operated within a declared disaster location. Check here for SBA declared disaster zones.
Credit Score
To qualify you will need to pass a credit check. If you do not have good credit, the SBA will consider other factors such as income, rental history, etc.
Ability to Repay
The SBA considers your ability to repay the loan back in full.
Form of Collateral
If you are applying for a loan of more than $25,000, SBA might require collateral to complete your loan process.
SBA Distaster Loans May Require Less Documentation
SBA disaster loans might require less documentation. According to JCK most SBA loan applicants might have to fill out only three documents:
IRS Form 4506-T, which lists a managing members and business’s owners; and a personal financial statement
And (SBA Form 413) completed, signed, and dated by the applicant as well as each principal and managing member of the business.
Why You Need Professional Help to Fill Out The App
Navigating the federal loan application process is complex, tedious and prone to user error.
Save yourself time and increase your chances of getting money by hiring experienced lawyers to handle your entire application.
The lawyers at Canterbury Law Group will handle your entire file from start to finish for a fair, fixed fee.
Call now to become one of the nation’s first federally rescued businesses. Call the firm at 480-744-7711 or [email protected]
Why Reinvent the wheel? The licensed attorneys at Canterbury Law Group have already perfected the means by which your company can timely obtain your share of the federal rescue dollars. Time is money, and by hiring Canterbury Law Group, you assure your application will be done on time, and correctly.
Contact Canterbury Law Group today to get help processing your application correctly. [email protected] or 480-744-7711
We Can Help You Get Your Share of the Federal Dollars!
The SBA is injecting cash to businesses affected by the recent disaster with a maximum of $2 Million per business.
Even the first one million applications that are denied are still guaranteed $10,000 in forgivable loans.
Loans for $200,000 or less do not require personal guarantees.
How does the disaster loan application process work?
There are reams of paperwork to fill out and documents you need to turn in.
The estimated time it takes to fully complete the application is between 8-15 hours.
Things you will need to turn in include:
Most recent federal tax return
Personal financial statements for owners with 20% or more ownership
Schedule of liabilities listing all fixed debts
Fill out all mandatory SBA paperwork
Year-end profit-and-loss statement and balance sheet for that tax year
A complete year-to-date profit-and-loss statement
Monthly sales figures to substantiate company economic damages
These loans will be
Competitive (rates 3.50%)
Strict on quality of financial information
Gone soon, first come, first paid
Easy to get early, hard to get later
And more is coming
Payroll tax credits
Possible cash support
And More loans
How Do I Qualify for the Small Business Disaster Loan?
Congress has approved $350 billion dollars for immediate distribution to businesses across the nation.
So long as you have less than 500 employees, were operating on Feb 15, 2020 and have suffered some economic damages, you likely qualify for immediate federal dollars.
Applicants obtaining less than $200,000 in federal aid need not sign any personal guarantees.
Applicants obtaining between $200k and $2mm in aid will have to personally guarantee their loans.
And, even the first one million applicants who are denied still will be awarded $10k in fully forgivable loan money.
In a word: You have nothing to lose in tendering your federal application.
Eligibility for SBA Disaster Loan
Am I eligible for a SBA disaster loan?
Yes you are eligible for the SBA disaster loan if you run a small business with less than 500 employees or:
Are a small business that meets the size standard of SBA
Are a 501(c)(3) with less than 500 employees
You are an individual operating as a sole proprietor
You are an individual operating as an independent contractor
You are an individual who’s self-employed who regularly carries on any business or trade
You are a Tribal business concern and meets SBA’s size standard
A 501(c)(19) Veterans Organization that meets the SBA size standard
In addition, some special rules may make you eligible:
If you are in the accommodation and food services sector (NAICS 72),
the 500-employee rule is applied on a per physical location basis
If you are operating as a franchise or receive financial assistance
from an approved Small Business Investment Company the normal
affiliation rules do not apply
Why You Need Professional Help to Fill Out The App
Navigating the federal loan application process is complex, tedious and prone to user error.
Save yourself time and increase your chances of getting money by hiring experienced lawyers to handle your entire application.
The lawyers at Canterbury Law Group will handle your entire file from start to finish for a fair, fixed fee.
Call now to become one of the nation’s first federally rescued businesses. Call the firm at 480-744-7711 or [email protected]
Why Reinvent the wheel? The licensed attorneys at Canterbury Law Group have already perfected the means by which your company can timely obtain your share of the federal rescue dollars. Time is money, and by hiring Canterbury Law Group, you assure your application will be done on time, and correctly.
Contact Canterbury Law Group today to get help processing your application correctly. [email protected] or 480-744-7711
Wondering whether you qualify for the SBA disaster loan for coronavirus COVID-19. The SBA (Small Business Administration) is stepping up to aid businesses impacted by the Coronavirus. Read on to learn more about recommendations and information regarding COVID-19.
In the current situation many homeowners and business owners are discovering their insurance does not cover as much as they had the impression it would creating issues with progressing forward. While the Coronavirus timeline is not clear at the moment – for many people it may impact their revenue for some time to come.
What is a Disaster Loan?
The role of the SBA has been to support business owners and they have special programs for certain sections of the population as well as offering loans at a low interest rate to assist owners of businesses, renters and homeowners following a disaster such as the coronavirus pandemic. Regardless of your insurance status, FEMA suggests applying for a Small Business Administration loan. There are different kinds of Small Business Administration disaster loans available and one of them should fit your situation.
Economic Injury Disaster Loan Program
This loan is offered to private people, small businesses and nonprofits within a certain area of disaster and is dependent on the degree of economic damage that has bene inflicted. Although property damage is not included as that is not harmed by COVID-19, there are other reasons this loan may apply because of a loss of demand for your products or service and prevent your business from operating. Topping out at $2,000,000 the loan can be financed based on you’re the loss you have sustained. If people cannot contact you, visit you and you cannot operate, this loan could be an ideal option.
Eligibility for EIDL
For this loan, you should do business in a county that has declared a disaster. The terms of repayment depends on your company’s ability to repay the loan. The first port of call will be to look on the Disaster Assistance page of the SBA website. You can also apply online, see affected areas, and check your SBA disaster loan application process.
Disaster Relief for COVID-19
The United States is faced with a large amount of economic fallout right now and the majority of states are eligible for EIDL – Be sure to check through at the SBA website before proceeding. The SBA foresees difficulties for small businesses in many areas such as:
Workforce capacity
Marketing needs
Supply chain and inventory shortfalls
Insurance coverage issues
Facility clean-up and remediation costs
Demand changes
Capital access
To have access to these loans you shouldn’t have any other sources of credit as an option and the loans can be utilized to make payroll as well as other expenses, pay debts, accounts payable, and more. Interest rates are 2.75% for nonprofits and 3.75% for small businesses. The term can be as long as thirty years, but this will very much be dependent on your own circumstances.
Physical Disaster Loans for Business
A physical disaster loan can help if your business has been physically damaged in areas that have been declared a disaster. Any business may apply for this loan and the majority of nonprofits may do so as well. Depending on your ability to repay the loan the terms may be flexible, lasting as long as thirty years and interest rates will top out at 4 percent if you have no other credit options and 8 percent if you do. You will need to verify you are in a location where you can apply for this loan by visiting the SBA webpage. If you meet the criteria, you will then have to commence the application process.
What Can a Physical Disaster Loans Be Used For?
They can be used for anything damaged at your physical location to return it’s to its condition prior to the disaster. This includes repairing or purchasing machinery, fixtures, equipment and improvements to the building as well as inventory. You can also get up to an extra 20 percent of your loan value if you improve in a way to prevent future damage to the property.
Physical Property and Home Disaster Loans
A homeowner may also get assistance from the SBA is an area that has been declared a disaster as they offer property and home disaster loans and loans for any loss not covered by insurance or any other form of coverage you may have.
Borrowing Amounts
You may borrow up to $200k to restore your home to the condition it was in prior to the disaster. But no new improvements can be made unless code or a building authority requires it to be. You may be eligible for an additional $40,000 for replacing personal property that has been damaged but it may not be used to replace collections, antiques, a pleasure boat, or RV’s. However, when it comes down to businesses, the most important considerations as to your ability to receive a loan will be your location, your credit history, and worthiness, the ability you have to repay the loan and any collateral you can offer.
The Disaster Loan Process with SBA
Creditworthiness will be key to obtaining a disaster loan. The SBA will do a credit check but if your credit is not great you can still get a loan if you can demonstrate you can pay it back. So, the SBA will also look at the regularity of you paying rent, utilities, and insurance. Knowing your credit score is a very good idea, however when you enter this process. There is no need to be overwrought by a few black marks on your FICA report – as long as most are in ok standing.
Collateral
If your needs exceed $25,000, it is very likely collateral will be required to obtain an SBA loan. However, if you have no collateral but qualify for an Economic Injury Disaster Loan by SBA, you may be required to provide what is available instead of facing a denial. You will be considered for a loan regardless of whether you can stand collateral or not.
Disaster Declaration
There are seven ways a disaster can be officially declared in an area so SBA Disaster Loans can be obtained according to MerchantMaverick:
Presidential Declaration for Individual Assistance: This must be declared by a state governor. The presidential declaration will activate FEMA and SBA Disaster Loans are then accessible nonprofits and businesses
Administrative Agency Declaration: The governor of a state declares this, and it activates the SBA Disaster Loan Program for homeowners, renters, and businesses.
Presidential Declaration for Public Assistance: Also declared by a state governor. Once the President approves loans for economic injury and physical damage to businesses are made available.
Secretary of Agriculture can declare a disaster area: The SBA Will then say when disaster loans for businesses relating to agriculture will become available.
Governor Certification Declaration: When a governor goes directly to the SBA and asks for a declaration based on the certification of damages in an area.
Additionally:
The Secretary Of Commerce may decide certain eligible small businesses have sustained an economic injury that is directly related to failures in commercial fisheries or resource disasters.
A Military Reservist Declaration for individuals considered “essential employees” who are called up for active duty as military reservists in the case of a military conflict. Working capital loans are available to businesses that cannot meet their expenses because essential employees are absent for the above reasons.
SBA Disaster Loan Terms & Rates
Here is a summary of rates and terms for the Economic Injury Disaster Loan and The Business Physical Disaster Loan:
Borrowing Amount: $2,000,000 maximum.
Term Lengths: 7 years maximum if credit is available – 30 years maximum if credit is not available.
Interest Rates: 4 percent maximum if credit is not available. 8 percent maximum if credit is available.
SBA Disaster Loan Application Process
You will need to apply through the Disaster Loan Assistance portal at the SBA website. Here you can check to see if your area is covered, apply and check your submitted application. Here are the documents you will need to proceed further:
Gather personal and business financial statements.
Include estimates to replace or repair items.
Obtain copies of the needed federal documents (income tax information) referenced in the application.
Provide a brief overview and history of your business.
Start making an itemized list of your losses.
You should know an SBA Disaster Loan can be finalized in as little as 21 days and you may get your funds in increments to cover costs.
Alternatives
If the SBA denies your application or you simply want to look around to find the best options for financing, there are options. Online loans may enable you to receive funds faster but be sure to pay special attention to the repayment terms and the interest rates as these will usually be greater than what the SBA is prepared to offer.
While the coronavirus outbreak creates chaos throughout many sectors of our economy, small businesses specifically, are carrying a substantial burden.
As the administration is developing relief packages that will, with fingers crossed, lift some of this financial strain, some are also going to other loans managed by the Small Business Administration.
The SBA’s Disaster Loan Program has a section called the Economic Injury Disaster Loan program, that may potentially help eligible small businesses, private non-profit organizations, and small agricultural associations.
On Monday, the SBA reported that it was going to defer existing current loan payments automatically to December 31, 2020.
Eligibility for the Small Business Disaster Loan
To be eligible for an SBA economic injury disaster loan, a business needs to prove significant economic injury – that it’s incapable of paying its normal and necessary operating costs. The loans point is to assist a business in riding out a disaster time until typical operations can continue – it applies to situations where no physical damage has occurred.
Businesses may secure up to $2 million, but their loan amounts are going to be based on an evaluation of genuine economic injury. As reported by the SBA, the interest rate on the loans won’t surpass 4% per year and terms won’t surpass 30 years.
Take note of the materials you need to have prepared to apply, as drafted by tax, accounting, and business consulting firm Blum Shapiro.
Employee Identification Numbers
The establishment date
Contact lists for Loss Verification Inspections
Number of years under present management
Personal details comprising of dates of birth, SS numbers, percentages of ownership and cell/phone numbers for each of the owners of the business
Additional details are required to be presented if any of the business’ owners have more than a 50% stake of ownership in a separate business
Personal financial statements are required to be complete for each of the owners
The debt totals
The value of personal property, receivables, and capital
The amount of liabilities that you’re conditionally liable for (for instance what’s the dollar amount of loans that you ensure)
