Small Business Administration (SBA) Loans
Wondering if you qualify for a Small Business Administration Disaster Loan?
Not sure where to start? Or what to do?
Our UPSIDE CFO team is here to guide you through this complicated process.
Eligibility
WHO IS ELIGIBLE FOR A SMALL BUSINESS LOAN?
Eligibility for a SBA Disaster Relief Loan is based on the following criteria:
- A small business is defined as 500 employees or fewer.
- Demonstrate that your business has been financially affected by COVID-19.
Other businesses indirectly related to industries that were harmed are also eligible. As an example, a manufacturing plant who made widgets had to close during the crisis.
Wholesalers and retailers of these widgets would have been affected as well. This vertical may have multiple businesses eligible for the loan.
WHO IS NOT ELIGIBLE FOR A SMALL BUSINESS LOAN?
You are NOT eligible for a SBA Disaster Relief Loan if your business is characterized by any of the following:
- Religious and charitable organizations
- Agriculture
- Gambling (including casinos and racetracks who derive at leas ⅓ income from gambling)
- Cannabis industry
SMALL BUSINESS ASSOCIATION (SBA) DISASTER LOAN TERMS
If you are considered an entity eligible for a loan you may borrow up to
- $2 million dollars
- At 3.75% (2.75% for no-profits)
- For up to 30 years.
Working capital loans are based on the size of your organization (remember, you must be a small business).
The rates for these loans are very low and the extended length of them make payments very pocket-friendly. If you’re facing overwhelming financial challenges in your business, it could be a viable way to help you with working capital during these challenging times.
UPDATE: Download our free SBA Loan checklist for a quick reference on required documentation!
Government application page for disaster assistance loans
Official information from SBA.gov
Getting Approved
HOW DO I GET APPROVED FOR A SMALL BUSINESS LOAN?
Think of the SBA Disaster Relief Loan like a mortgage.
There are 2 components to getting approved for a Small Business Association Disaster Relief Loan:
- The DEBT SERVICE piece (monthly payments)
- COLLATERAL (such as the house for a mortgage)
You must qualify for both. Many other SBA programs have real estate pledged as collateral. The SBA economic injury loans do not appear to require real estate as collateral. These are working capital loans.
A few other criteria are that your business must:
- CREDIT HISTORY: have acceptable credit history,
- LOCATION: be physically located in the declared county,
- RELATED TO ECONOMIC DOWNTURN: Your business must demonstrate that it has suffered working capital losses due to the declared disaster. Losses due to a “normal” downturn in the economy or other reasons not directly related to the disaster are not considered eligible. (This can be tricky.)
Usage of Funds
HOW CAN MY BUSINESS USE FUNDS FROM A SMALL BUSINESS LOAN?
Funds from the SBA Disaster Relief Loan are for working capital.
If you get approved for a SBA Loan, funds may be used to cover
- Payroll,
- Accounts payable,
- Any fixed debts,
- Other bills that could have been paid had the disaster not occurred.
The loans are not intended to replace profits, lost revenue, or expansion. SBA funds cannot be used to pay down long-term debt.
We recommend forecasting at least 6 months worth of:
- Rent
- Payroll
- Debt Service
- Accounts Payable
- Other expenses
These expenses should be put in a spreadsheet or table showing your future cash outflows.
Does forecasting give you anxiety? We’re here for you!
We can take the burden off your shoulders. Our UPSIDE CFO team can help you put together a forecast quickly and correctly.
Supplemental Information
HOW DO I GET APPROVED FOR A SMALL BUSINESS LOAN?
Think of the SBA Disaster Relief Loan like a mortgage.
Additionally, to all the application information above, you will need:
- Your most recent tax return prepared and filed by your business.
- If you havn’t filed 2019 yet, then the financial statements for the period ending 12/31/19.
(i.e., a Profit & Loss statement and Balance Sheet) - You will also need to provide current-year financial statements (2020) and sales figures for the 36 months prior to the disaster.
Are your financials not in good order? That’s why we are here. It’s literally what we do every day!
Applying for the SBA Economic Injury Disaster Loan
HOW DO I APPLY FOR A SBA SMALL BUSINESS LOAN?
Look through the resources below, and then submit everything through the online portal at SBA.gov!
APPLICATION PROCESS
APPLICATION DOCUMENTS
SUPPLEMENTAL INFORMATION FORMS AND WORKSHEETS
IN OVER YOUR HEAD?
UPSIDE CFO is here to help.
If you find this process overwhelming, you’re not alone. During this stressful time for your business as you’re trying to manage cash flow and stay afloat, the last thing you need is to be bogged down by a million forms and documents. Let us take the weight off your shoulders and help you get your loan application together with less stress.
Get started today. Availability is limited.
1 – Contact Us for Assistance. Fill out a simple form on the next page and we’ll be in touch shortly.
2 – We Make the Process Simple. Our experienced team will help you get your financials in order and get your application submitted quickly and easily.
3 – Submit Your Loan Application With Less Stress. And be on your way to working capital that you can put into your business during this critical time.