Small businesses in Ohio are now eligible to apply for economic disaster relief loans through the United States Small Business Administration (SBA) related to coronavirus. Businesses can apply for loans to help overcome the temporary loss of revenue they are experiencing. Here are some details on the loans available for small businesses and non-profit organizations:
- SBA loans can be up to $2 million
- Loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the impact from COVID-19
- The interest rate is 3.75% for small businesses without credit available elsewhere. Businesses with credit available elsewhere are not eligible
- The interest rate for non-profit organizations is 2.75%
- Terms of the loans are determined on a case by case basis, based on each borrower’s ability to repay, up to a maximum of 30 years
Small businesses may apply either online, in-person at a disaster center or by mail. The recommended option to apply is online at https://disasterloan.sba.gov/ela/. To expediate the loan approval process, be prepared with the following documentation when completing the application:
- Copies of the 3 most recent business Federal Income Tax Returns, including all schedules. If the most recent federal income tax return hasn’t been filed yet, a year-end balance sheet and profit and loss statement is acceptable
- A current (within the last 90 days) business balance sheet, profit & loss statement and a current schedule of liabilities
- A personal financial statement (within the past 90 days) will be required for a sole proprietor or for each business owner having a 20% or more interest and each general partner. For these individuals, a copy of the most recent Federal Income Tax Return, including all schedules is also required
- A copy of the Federal Income Tax Return, including all schedules, for each affiliate business. Affiliates include business parents, subsidiaries or other businesses with common ownership or management
- Completed and signed IRS Form 4506-T for each business owner having a 20% or more business interest, each general partner, and each owner having 50% or more interest in an affiliate business
- If your insurance covers a part of this loss, provide the name the insurance company, policy number and agent contact information.
- Monthly sales figures (you may estimate if actual figures are not available) beginning 3 years prior to the coronavirus pandemic and continuing through the most recent month.
Once the Small Business Administration reviews your credit and application, a loan officer will contact you to discuss the loan recommendations and your next steps. You will also be advised in writing of all loan decisions. The SBA will then prepare and send your loan closing documents for signature. An initial disbursement of $25,000 will be sent within 5 days of receiving the signed loan documents. A case manager will then be assigned to ensure that you meet all loan conditions and will schedule the subsequent loan disbursements.
For additional assistance please visit the SBA website dedicated to Coronavirus: Small Business Guidance & Loan Resources https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources#section-header-0.
Please contact our office with additional questions or assistance.