SBA Economic Injury Disaster Loans (EIDL)
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
Small businesses can apply directly to the SBA at https://disasterloan.sba.gov/
These loans may be used to pay the following expenses that cannot be met because of the COVID-19 impact:
- fixed debts
- accounts payable
- other financial obligations for ordinary and necessary operating expenses
Information regarding the loan process and required documents needed to file is outlined in the SBA’s 2-page document: Three Step Process SBA Disaster Loans
What are the rates and terms?
- $2 million in disaster assistance loan, does not impact other SBA lending amounts.
- The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- Long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
Required Forms & Documentation
- SBA Form 5 (legal entity applicant) or 5C (sole proprietor applicant)
- SBA Form 4506T for applicant, guarantors, and affiliates
- SBA Form 2202 (schedule of liabilities)
- SBA Form 1368 (monthly sales history)
- SBA Form 413 (personal financial statement) for all 20% or more owners
- Current financial information, including most recent Business Tax Return, most recent fiscal year end financials, current financial statements (within 90 days), and most recent Personal Tax Return of all 20% or more owners.
Forms and additional information available at: https://disasterloan.sba.gov/ela/Information/PaperForms
How can Alerus help?
Alerus is here to help you navigate the application process. While businesses will apply for these loans directly to the SBA, you can reach out to us for guidance and with questions.
The most up-to-date website on SBA’s Disaster Assistance in response to Coronavirus (COVID-19) is: https://www.sba.gov/coronavirus