WEBINAR: US Small Business Administration Economic Injury Disaster - PowerPoint PPT Presentation

WEBINAR: US Small Business Administration Economic Injury Disaster Loan Program Brought to you by the University of St. Thomas: • Schulze School of Entrepreneurship • Small Business Development Center • Family Business Center

US Small Business Administration Economic Injury Disaster Loan Program Small Business Development Center www.stthomas.edu/centers/sbdc smallbusiness@stthomas.edu 651.962.4500

Small Business Development Center • Nationwide Program • St. Thomas Partnership with SBA since 1981 • Free & Confidential Business Advising

Economic Injury Disaster Loan (EIDL) Upon request from Governor Tim Walz, the U.S. Small Business Administration is offering low- interest federal disaster loans for working capital to Minnesota small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

Economic Injury Disaster Loan (EIDL) Program Details • Eligible entities may borrow up to $2 million dollars. • The interest rates for this disaster are 3.75 percent for small businesses and 2.75 percent for nonprofit organizations. • Terms up to 30 years, with no prepayment penalties. • There is no cost to apply. • 12-month deferral (from closing date) for first payment.

Economic Injury Disaster Loan (EIDL) Program Details • Economic Injury Disaster Loans over $25,000 require collateral. • SBA's EIDL's funds come directly from the U.S. Treasury. • Applicants do not go through a bank to apply. • Apply directly to the SBA's Disaster Assistance Program at DisasterLoan.sba.gov.

Determining Loan Amount • SBA Determines Loan Amount and Term • Estimating Your Business Losses – Replacement of revenue to breakeven • Allowable Use of Funds – Debt payments, payroll, rent, accounts payable, other – No debt re-finance • Estimating Length of Disaster – SBA “looking at” six month disaster period

Program Eligibility • The applicant business must have a physical presence in Minnesota. • The applicant's economic presence alone in Minnesota does not meet this requirement. • The applicant must show substantial economic injury directly or indirectly as a result of Coronavirus. • Ineligible businesses include: Agricultural Enterprises, Religious Organizations, Charitable Organizations, Gambling Concerns, Casinos and Racetracks.

Program Eligibility • The Applicant's business meets the requirements of the SBA's definition of a "Small Business." • The Applicant's business has a minimum of one-year operating history. • The Applicant has an acceptable credit score. • The Applicant can show ability to repay the loan after the deferral period. • The Applicant will personally guarantee the loan. • The Applicant will pledge collateral for loans over $25,000.

Application Process • Multiple Government Forms • No Cost to Apply • First Step – Eligibility (evidence of injury, pre-disaster cash flow, credit score) • Next Steps – Estimate business losses (SBA form 1368) – Complete paper application/Input on-line • Three Week Decision (SBA target) – Add a couple weeks for disbursement if approved

SBA Economic Injury Disaster Loan (EIDL) On-Line Application https://disasterloan.sba.gov/ela/ Forms Loan Application – SBA Form 5 https://disasterloan.sba.gov/ela/Documents/Disaster%20Business%20Loan%20Application%20(SBA%20Form%205).aspx Loan Application for Sole Proprietorships - SBA Form 5C https://disasterloan.sba.gov/ela/Documents/Disaster%20Home%20Loan%20Application%20(SBA%20Form%205c).aspx Personal Financial Statement – SBA Form 413D https://disasterloan.sba.gov/ela/Documents/Personal_Financial_Statement.aspx Schedule of Liabilities – SBA Form 2202 https://disasterloan.sba.gov/ela/Documents/Schedule_of_Liabilities.aspx Additional Filing Requirement, Monthly Sales – SBA Form 1368 https://disasterloan.sba.gov/ela/Documents/Monthly_Sales_Figures_(1368).aspx Request for Transcript of Tax Return – IRS Form 4506-T https://disasterloan.sba.gov/ela/Documents/Request%20for%20Transcript%20of%20Tax%20Return%20(IRS%20Form%204506T).aspx?pt=Home&s p=1 EIDL Supporting Information https://disasterloan.sba.gov/ela/Documents/EIDL%20Supporting%20Information%20(P-019).pdf

Future Webinars • Tuesday, March 31 HR Policies & Practices During Crisis Ron Linneman, Employee Benefits Consultant, WA Group • Business Owner Panel Sharing Wins: What’s Working in Your Business • Have a need or idea for more? Email schulzeschool@stthomas.edu.

US Small Business Administration Economic Injury Disaster Loan Program Small Business Development Center www.stthomas.edu/centers/sbdc smallbusiness@stthomas.edu 651.962.4500