EIDL Masterclass Everything you need to know about the Disaster Loan Program
Financial Blind Spot How we help Valuation Protection What’s my company How do I protect it? worth? Growth Transfer How do I grow How do I transfer out sustainably? when it’s time? will@blindspotfinancial.com 914.873.4814
Agenda 01 Program Overview - CARES Act version 02 Terms & Conditions 03 Fine Print - Loan Authorization & Agreement 04 Fine Print - Promissory Note 05 Strategic Considerations
Program Overview CARES Act Version
EIDL Overview CARES Act Version Small businesses in all US states and Initially funded with $10 billion, the territories are eligible to apply for a EIDL program received an additional low-interest loan. $60 billion to work through its backlog These loans are processed, underwritten and The $60 of new funding is split as follows: issued by the SBA. ● $10 billion for disaster grants ● $50 billion for disaster loans Potentially Eligible Companies: ● Small Businesses (500 employees or less) On June 12th, as per the SBA: ● Sole proprietorships, with or without ● 3,245,006 advances had been disbursed, employees, and independent contractors totaling $10,711,701,000 ● Small Agricultural Cooperatives and ● 1,332,955 loans had been approved, ESOPs (500 or fewer employees) totaling $90,928,747,622 ELIGIBILITY ● Most Private Nonprofit Organizations FUNDING ● Tribal Small Business Concerns
EIDL Overview CARES Act Version (continued) The SBA can provide up Rules related to personal Entities applying for to $150,000 to pay fixed guarantees on advances EIDLs may request an debts, payroll, accounts and loans of $200,000 or emergency advance of payable and other bills less: waived for all up to $10,000 ($1,000 that can’t be paid applicants; per employee), which because of the disaster’s does not have to be WAIVED REQUIREMENTS impact. "1 year in business prior repaid, even if the loan to the disaster" application is later Your loan amount will be requirement: waived. denied. based on your actual (must have been in LOAN AMOUNT economic injury and your operation on January 31, Advances may be used company’s financial 2020) for the same purposes ADVANCES needs. as the loan. Applicant be unable to There is no forgiveness find credit elsewhere: provision requirement waived
EIDL Terms & Conditions How your loan works
EIDL Terms How your loan works Substantial economic injury Grace period The business is unable to The first month’s payments meet its obligations and to pay are deferred a full year from its ordinary and necessary the date of the promissory operating expenses note. Interest Rate Repayment Terms The repayment term is not to exceed 30 years 2.75% for nonprofits 3.75% for all other entities Loan Purpose Collateral EIDLs provide the necessary $25,000 and under: none working capital to help small $25,000+: business assets businesses survive until normal operations resume after a disaster.
FINE PRINT
Strategic Considerations 1 2 3 4 5 Advance and PPP Business Structure Growth Plans Misuse of funds Other Financing Your EIDL advance Sole proprietor? If your funding needs Triggers civil liability to Subordination reduces, dollar for Personal assets may include an expansion SBA for 1.5X the agreement dollar, the amount that be on the line project, EIDL funds proceeds disbursed, considerations you can get forgiven are not a good fit. plus other potential on your PPP Multiple owners? penalties EIDL balance may Consider contingency Do you need more limit opportunities planning than $150,000?
Financial Blind Spot How we help Valuation Protection What’s my company How do I protect it? worth? Growth Transfer How do I grow How do I transfer out sustainably? when it’s time? will@blindspotfinancial.com 914.873.4814
Recommend
More recommend
