U.S. Small Business Administration (SBA) offering disaster assistance in response to COVID-19

UPDATED 3/26/20

Current: Economic Injury Disaster Loan (EIDL)

•Declaration must first be made by state Governor to SBA with approval process to follow.


•Loans available up to $2 million.


•Loan interest rates are 3.75% for small businesses and 2.75% for nonprofits  (currently, no there is no provision to lower the rates).


•Employers with 500 employees or less are eligible.


•Maximum loan term of up to 30 years (term is determined on a case-by-case basis).


•Must have applicable credit history.


•Must show ability to repay loan.


•Collateral is required for loans over $25,000. SBA accepts real estate as collateral when applicable. SBA will not decline a loan for lack of collateral and will require borrower pledge collateral that is available.

Pending: Paycheck Protection Program (CARES Act)

*CARES Act is currently in legislation; will update details as information is provided

•Loans available up to $10 million.


Loan amount is calculated at 2.5 times average payroll expenses over a 12-month period.


Loan interest rates capped at 4%


•Maximum loan term of up to 10 years (term is determined on a case-by-case basis).


•Must have applicable credit history


•Must show ability to repay loan. Note: CARES Act calls for deferment of payment is automatically 6 months and up to 1 year.


Loan Forgiveness is determined as the cost of maintaining payroll from 3/1/20- 6/30/20


•Forgiveness is determined as the cost of maintaining payroll from 3/1/20  - 6/30/20.


Qualifications for loan forgiveness in here:


Not for employees currently getting FFCRA Sick or Leave pay


Employees with Annual Salaries of 100k or more in 2019 are excluded from forgiveness


Loan forgiveness can be reduced (not increased) by a formula of:

# of FTE Equivalents during period / # of FTE equivalents from Jan 1, 2020 to Feb 29, 2020


Special calculations for seasonal employers


Loan will be reduced also by any wages for an employee who’s pay is now more than 25% higher than it was prior to the loan (so don’t give a big raise to get it forgiven)


Loan forgiveness is also reduced for any employee that in 2019 had an annualized salary of 100k or more


If a loan is made… Any officer whose total compensation (salary, bonus, stock, or financial awards) is $425,000 or more in 2019 (unless in a collective bargaining agreement prior to 3/1/2020) cannot receive compensation more than the total compensation received in 2019.


Loans will be available with SBA and approved lenders


Interest rate is capped at 4%


•Businesses who receive Paycheck Protection Program loans to cover employee salaries, payroll support, mortgage or other debt obligations cannot also receive EIDL loans for the same purpose.

Be prepared (get the documentation ready!)

•Current financial information (income, balances of bank/credit accounts and monthly expenses).

The forms needed are:

-Form 5 - Business Loan Application

-P-019 - Economic Injury Disaster Loan Supporting Information

-SBA Form 413 - Personal Financial Statement

-Form 4506-T - For business, personal and any related businesses (ie. real estate partnership, etc.)

-SBA form 2202 - Schedule of Liabilities


•Additional information may be requested. Applicants have 7 days to respond to additional requests.

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