Emergency Relief for Small Businesses: What You Need To Know About EIDL SBA Loans
All Small business owners should apply for an EIDL SBA loan.
The SBA is offering low interest, long term loans to small businesses for working capital.
Even if you think that your business is going to do well throughout this national emergency, still, apply for the loan. Use it as a line of credit to super charge your growth as you come out on the other side.
What is the SBA and the CARES Act?
In response to the economic impact of the Coronavirus, the SBA, as part of the CARES Act is offering two major programs to provide emergency relief to small businesses:
Economic Injury Disaster Loan Program (EIDL) - offering 2.75 to 3.75% loans, up to $2MM, for continuing operations.
Paycheck protection program - more to come on this. This post is going to focus on #1, the SBA EIDL.
Who is the SBA?
The Small Business Administration (SBA) is a cabinet level office, with the goal of helping entrepreneurs and small businesses. Typically, the organization works with banks, to provide loans and guidance, with the SBA backing the loans.
What is the Emergency Injury Disaster Loan (EIDL) Program?
The EIDL program is generally used for businesses who have survived a nasty natural disaster, such as Hurricane Katrina. When the Coronavirus was deemed a national disaster, funds were opened up for small business.
What is considered a small business?
Typically, a small business has less than 250 employees. But check out this site to determine if your business qualifies.
What types of organizations qualify for a SBA Loan?
LLCs, S-Corps, partnerships, sole proprietors, homeowners and non-profits
How to Apply for an SBA EIDL
At the time of publishing this post, the online process was not currently available instead, you can download the SBA forms , fill them out, and then upload.
To apply for a SBA EIDL you must submit the five forms below:
1. SBA Application (Form 5)
2. IRS Form 4506T
3. SBA Form 413
4. Form 413D
5. Loan Supporting Information Form
6. Last company federal tax return
SBA Application form 5/5c
The first form, the application, will depend on the type of organization:
SBA Form 5: Multi-Member Entities Application (such as LLC, S-Corp, Non-Profit, etc.)
SBA Form 5c: Homeowner / Sole Proprietor Loan Application
Form 5 Tips
Check EIDL in #1.
When picking your entity type, check your state corporation’s division to confirm type and get the date the business was created. For GA businesses, go here.
Note: The “Applicant name” is the business name, not your personal name.
You will need your FED EIN.
In #17, you need to add personal ownership names and addresses.
IRS Form 4506T
Fill out IRS Form 4506T for each member/owner. This is so the SBA can get a transcript of your taxes.
SBA form 413
The SBA form 413, found here, will need to be filled out for each of the owners (>20%).
Form 413D
Form 413D is a personal financial statement
Loan Supporting Information
Last but not least, the loan supporting information, found here.
Company’s last Fed tax return
Submit Your Forms
Once all of your forms are filled out, signed and dated, Upload PDFs here.
If you run a small business, these are trying times. If you have questions or concerns, I am available to help you, just reach out.