Once the governor of your state issues a disaster declaration, businesses in your state are eligible for SBA Disaster Loans under the Economic Injury Disaster Loan declaration made by President Trump on March 12.
COVID-19 SBA Disaster Loan
Comprehensive Guide to COVID-19 Relief Funding
Let’s save American businesses together!
What Business Owners Should Know
- Loans may be used to pay fixed debts, payroll, accounts payable or any other bills.
- SBA’s Disaster Loans offer up to $2 million in assistance and can provide vital economic support.
- Rates for businesses are 3.75% and for non-profits are 2.75%.
- Loan terms are determined on a case-by-case basis but can be up to 30 years.
- Find out if businesses in your state are eligible and apply for SBA Disaster Loans at SBA.GOV.
- It is presently taking 8-12 weeks for applications to be processed and funds issued. Demand will likely increase over the coming days and lead times could increase. If you are in more immediate need, apply for a bridge loan.
- As of March 27, qualified applicants for SBA Disaster Loans are automatically qualifying for up to $10,000 in grant money.
- As of March 27, Federal Government enacted the CARES ACT
- As of March 27, Federal Government Announced the Paycheck Protection Program (PPP)
Bridge Loan Product Overview
- Taycor has developed a Bridge Loan Product in response to the U.S. economic fallout associated with COVID-19.
- Bridge Loans can be issued in as little as 48 hours.
- Terms vary based on time in business and credit history, but the following options are available for qualified applicants:
- 5-Year Term Loans, Lines of Credit, & Accounts Receivable Financing
- Low Single Digit Rates
- Monthly Payment Options
- No Pre-Payment Penalty
- It is important to note that we are in a dynamic market and terms may change without notice based on shifts in the economic landscape.
- We recommend that businesses with immediate needs apply while these rates and terms are available.
- We are now requiring month-to-date bank statements along with our standard prior 3-6 months bank statements.
- Other conditions may apply based on borrowing history and industry.
SBA Disaster Loan Product (EIDL) Overview
- As of March 23, businesses in every state plus American Samoa, Guam, Northern Mariana Island, Puerto Rico and the U.S. Virgin Islands can apply at SBA.GOV.
- Loan amounts are up to $2 million.
- Loans may be used to pay fixed debts, payroll, accounts payable or any other bills. Note that with the introduction of the Paycheck Protection Program (PPP) certain considerations should be made as to the allocation of funds as PPP is also designated to assist businesses cover payroll, rent and utilities. As such, allocating the Disaster Loan to similar uses could decrease the PPP approval amount.
- Rates start at 3.75% for businesses with payment deferred over the first 12 months.
- Terms are determined on a case-by-case basis but can be up to 30 years.
- Processing times as of March 31 were 8-12 weeks but are increasing based on demand.
- Documents Required
- SBA Form 5 (applicant, principals & affiliates)
- Complete copy of most recent Federal Income Tax Returns
- Federal Income Tax Return for each principal owning 20 percent or more, each general partner or managing member
- Personal Financial Statement (SBA Form 413)
- Schedule of Liabilities (SBA Form 2202)
- Other Criteria
- Applicants must have a credit history acceptable to SBA.
- Applicants must show the ability to repay all loans.
- As of March 27, collateral requirements have been waived.
- Principals must have a business risk resulting from investing in facilities and equipment and by incurring ongoing expenses, which must be paid regardless of whether the operation generates a profit.
- Ineligible Uses of EIDL Loan Proceeds
- Refinancing long term debt
- Paying down or paying off loans provided, guaranteed or insured by another Federal agency or a Small Business Investment Company
- Federal Deposit Insurance Corporation (FDIC) and Resolution Trust Corporation (RTC) are not considered Federal agencies for this purpose
- Payment of any part of a direct Federal debt, (including SBA loans) except IRS obligations
- If a direct Federal debt is delinquent, SBA must have written documentation from the appropriate Federal agency explaining how the delinquency will be cured.
- Ineligible EIDL Applicants
- Concerns determined by SBA to have credit available elsewhere
- Religious Organizations
- Charitable Organization
- Consumer Marketing Cooperatives (except small agricultural Co-Ops)
- Gambling Concerns
- Casinos & Racetracks
- Concerns Engaged in Illegal Activities
- Lending or Investing concerns
- Speculative Activities
- Pawn Shops
- Multi-Level Sales distribution (Pyramid) concerns
- Loan Packagers who derive 30% or more of their annual income from the preparation of applications seeking financial assistance from SBA
- Concerns with principals incarcerated, on parole or probation
- Government owned entities
- Political or Lobbying Concerns
- Concerns engaged in the sale of products or Services or Live performances of a prurient sexual nature
OTHER STATE & LOCAL RELIEF PROGRAMS
- San Francisco COVID-19 Small Business Resiliency Fund: $10K in emergency funding to help cover rent and employee salaries. Must show a lost of 25% of revenue or more.
- City of Los Angeles Small Business Emergency Microloan Program: $5-20K. Terms of 6-12 months at 0% and five-year loans rates of 3% to 5%. Loan requires personal guarantee if you own 20% or more.
- Denver Small Business Emergency Relief: Cash grants of up to $7.5K. Eligible for small businesses that have lost the ability to operate including: restaurants, retail shops, barbershops, and nail salons.
- Florida Small Business Emergency Bridge Loan Program: Loans of up to $50-100K. Loans are meant to serve as short-term funding that can be repaid once businesses can access alternative funding. Loans are interest-free for one year; and 12% after that. Businesses with 2 to 50 employees are eligible.
- Atlanta Business Continuity Loan Fund: Loans of up to $30k may be applied for through the City of Atlanta’s economic development authority. Up to a five-year term, 0% interest, with a 6 to 12-month deferment before the first payment.
- Chicago Small Business Resiliency Fund: Starting March 31, small businesses can apply for up to $50K with repayment terms of up to five years. You must demonstrate a 25% in revenue, have less than $3 million in revenue and fewer than 50 employees, and have no current tax liens or legal judgments.
- Michigan Small Business Relief Program: Starting April 1, grants of up to $10K will be available to small businesses to help cover working capital expenses. Loans will be available in the amounts of $50K to $200K at rate of 0.25%.
- Minnesota Small Business Emergency Loans: To assist Minnesota small businesses in select hard-hit industries, interest-free loans of up to $35k may be available with a five-year term and deferred payments for six months.
- Minnesota Small Business Loan Guarantees: Loans available from select commercial funding sources may be partially guaranteed (80%) by the state of Minnesota up to a limit of $200k. Rates and terms vary by lender.
- New York City Employee Retention Grant Program: Businesses with 1 to 4 employees can apply for a grant of up to $27K that covers 40% of payroll costs over the course of two months. You must show that you lost 25% of your revenue due to the coronavirus.
- New York City Small Business Continuity Fund: Business with fewer than 100 employees can get up to $75K in interest-free loans from the city to cover revenue losses. Must have experienced 25% or greater reduction in revenue.
- North Carolina COVID-19 Rapid Recovery Lending Program: Up to $50k, or two months of current business revenues, may be available to North Carolina businesses on a four-year term with a low interest rate. No payments and no interest for the first six months.
- Beaverton Emergency Business Assistance Program: Business ordered to close can apply for $2,500 per month in rent or mortgage reimbursement. Businesses with fewer than 50 employees are eligible.
- Hillsboro Small Business Emergency Relief Program: March 23 to April 20, businesses in Hillsboro can apply to receive a $5K grant to offset losses associated with the coronavirus. Business must have 10 or fewer employees to qualify.
- Jade District-Old Town COVID-19 Small Business Response Fund: In Portland, businesses in the Jade District and Old Town Chinatown can apply for emergency funding. Up to $190K total is available.
- Philadelphia COVID-19 Small Business Relief Fund: Apply for an assistance grant of up to $25k—or a zero-interest loan of up to $100k—based upon annual revenues and other consideration. For Philadelphia, PA businesses.
Events & Updates
|March 12th||Presidents Trump signs Economic Injury Disaster declaration|
|March 16th||Taycor Extends to Business Borrowers Bridge Loan Products|
|March 17th||SBA revises criteria. States and territories only required to certify that at least five businesses within state/territory have suffered substantial economic injury.|
|March 17th||SBA makes SBA Disaster Assistance Loans available statewide|
|March 20th||IRS Extends Filing Date for Federal Income Tax to July 15, 2020.|
|March 23rd||Federal Reserve announced its Main Street program for small & medium businesses. These efforts will complement the current SBA programs. Details to come.|
|March 27th||SBA waived collateral requirements for Disaster Loans.|
|March 27th||Government Ratified the CARES Act.|
|March 27th||Government Announced the Paycheck Protection Program (PPP).|
Last Updated: March 31, 2020*