The U.S. Small Business Administration (SBA) is being called upon to help thousands of small businesses in regards to the coronavirus, and the impact it has had economically on many business owners. The paycheck protection program is a pending $2.2 trillion aid, which is significantly expected to broaden its mandate, putting it in charge of a $350 billion loan program for businesses that have fewer than 500 employees.
Here are some details on how small business owners can access SBA resources:
Q: Who qualifies for these small business loans?
Businesses who have under 500 employees and are unable to pay their bills due to the coronavirus pandemic. This applies to all U.S. states.
Q: Where can I apply for an SBA loan?
You can apply online at sba.gov where you can upload business documents and apply for a loan. There are also PDF documents linked on the agency’s website that you can fill out and mail to the SBA’s processing and disbursement center at 14925 Kingsport Rd., Fortworth, Tex., 76155-2243.
Q: How long will it take?
Once you submit an application, the SBA will review your credit before conducting its own inspection to verify your losses, which will include reviewing any insurance recoveries. The agency can issue you a loan while your recoveries are pending. The SBA’s goal is to reach a decision within two to three months. Once they determine you are eligible, they will send you a loan closing document for your signature. There will be a schedule set by your loan officer who will make sure you meet all loan conditions. The agency will send you an initial disbursement of $25,000 which will arrive within five days, and the rest will be disbursed on a schedule until you receive the full amount.
Q: How much can I receive through an SBA disaster loan?
Since President Trump has declared the coronavirus pandemic a national emergency, small businesses, small agricultural cooperatives, and private nonprofits can borrow up to $2 million for “economic injury” which means that the organization cannot pay its ordinary and necessary expenses because of the coronavirus pandemic.
Q: What will the interest rate be?
The interest rates on these loans are 3.75 percent for small businesses and 2.75 percent for nonprofits.
Q: What information will I be asked to provide?
Loan applicants will be asked to provide the following:
- Transcripts of their most recent tax return
- A tax information authorization form
- A detailed accounting of personal assets, sources of income, and unpaid taxes.
Applicants will also be asked to include names and personally identifiable information for all proprietors, partners, or stockholders who own at least 20 percent of the business. Nonprofit organizations can substitute tax returns for the organization’s IRS tax-exempt certification with complete copies of the organization’s statement of activities. If any applicant submits false information there will be criminal penalties.
Q: What if I haven’t filed my taxes yet?
In replacement of a tax return, the SBA will ask for a year-end profit-and-loss statement and balance sheet for that tax year.
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