As your Dallas office and warehouse space rent and debt payments come due you may wonder if there is any help out there. Lucky for you there is. This report come from one of our key lenders, Chuck Forshaw at Bank of the West.
The SBA had a conference call with lenders providing some guidance. Following is Chuck’s synopsis of that presentation. If you need assistance, I will do my best to help. I hope you find the summary useful
WHAT BUSINESSES ARE ELIGIBLE TO APPLY?
SBA’s Economic Injury Disaster Loans (or working capital loans) are available to small businesses, small agricultural cooperatives, small aquaculture businesses and most private non-profit organizations
WHAT IS THE CRITERIA FOR ELIGIBILITY?
- Credit History-Applicants must have a credit history acceptable to SBA.
- Repayment –SBA must determine that the applicant business has the ability to repay the SBA loan.
- Eligibility- The applicant business must be physically located in a declared county and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons.
HOW MUCH CAN I BORROW?
- Eligible entities may qualify for loans up to $2 million.
- The interest rates for this disaster are 3.75 percent for small businesses and
2.75 percent for nonprofit organizations with terms up to 30 years.
- Eligibility for these working capital loans are based on the size (must be a small business) and type of business and its financial resources.
HOW CAN I USE THE LOAN FUNDS?
- These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or for expansion.
WHAT ARE COLLATERAL REQUIREMENTS?
- Economic Injury Disaster Loans over $25,000 require collateral.
- SBA takes real estate as collateral when it is available.
- SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available
BASIC FILING REQUREMENTS
- Completed SBA loan application (SBA Form 5).
- Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
- Be sure the name styling and TIN match the tax returns exactly or the IRS will return the form ‘Not Found’
- Tax Years 2016, 2017 and 2018 will be used
- They may, at a later time, request additional information
- Actual Tax Returns are not required – the SBA will us the tax transcripts from eh IRS utilizing Form 4506T
- Schedule of Liabilities (SBA Form 2202).
- Personal Financial Statement (SBA Form 413).
HOW TO APPLY
- Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela.
- Paper loan applications can be downloaded from www.sba.gov/disaster . Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
- Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955
(800-877-8339 for the deaf and hard-of-hearing) or by sending an email to firstname.lastname@example.org.
SUBIT YOUR APPLICATION AS SOON AS POSSIBLE
- Recheck the filing requirements to ensure that all the needed information is submitted.
- The biggest reason for delays in processing is due to missing information. Make sure to complete all filing requirements before submitting the application and forms.
- If more funds are needed, applicants can submit supporting documents and a request for an increase. If less funds are needed, applicants can request a reduction in the loan amount.
- If the loan request is denied, the applicant will be given up to six months in which to provide new information and submit a written request for reconsideration.
- The borrower still has to qualify and demonstrate repayment ability prior to the disaster declaration.
- They stressed that although a paper application and forms are acceptable, filing electronically is easier, faster and more accurate
- If the server is down or slow, keep trying. I would assume trying during off hours will be better. I also heard if you have a slow connection, their server will time out.
- DO NOT lose you Login and Password. There is not method of recovery and you will have to start the process from the beginning
- Once again, be sure the name styling and TIN match the tax returns exactly or the IRS will return the form ‘Not Found’
- At some point, you will receive an email confirmation of receipt
- While they do not know exactly how long it will take to make a decision, they mentioned ‘a couple of weeks’
For more info contact:
Sr. Vice President
Bank of the West
108 West Northwest Hwy.
Grapevine, TX 76051