Here is a new opportunity for you and your clients to apply for the SBA’s Economic Injury Disaster Loans and Advance Program. It was reopened after several weeks to allow small business and non-profits to apply for loans that were impacted by CO-19.
The SBA yesterday announced that the Economic Injury Disaster Loan (EIDL) and EIDL Advance program applications will be accepted for both non-agricultural business and non-profit business.
Also note that these monies can be used for a variety of purposes. Especially useful is the ability to reduce or illuminate any tax liabilities to the IRS that may now exits.
The cost these loans is very affordable at 3.75% and are payable over 30 years. Compare this to the costs in penalties and interest payable to the IRS. this might be a good alternative.
There is ‘lot of small print’ in this program so be careful.
You might want to secure the help of a CPA professional to help you through the process.
Here are the facts that you need to consider…
SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance
The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury because of COVID-19 in all U.S. states, Washington D.C., and territories.
These loans may be used to pay debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response.
The SBA is also assisting small businesses and non-profits with access to the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30, 2020.
STREAMLINED PROCESS REQUIREMENTS
SBA is collecting the requested information to make a loan under SBA’s Economic Injury Disaster Loan Program to the qualified entities listed in this application that are impacted by the Coronavirus (COVID-19).
The information will be used in determining whether the applicant is eligible for an economic injury loan. If you do not submit all the information requested, your loan cannot be fully processed.
The Applicant understands that the SBA is relying upon the self-certifications contained in this application to verify that the Applicant is an eligible entity to receive the advance, and that the Applicant is providing this self-certification under penalty of perjury pursuant to 28 U.S.C. 1746 for verification purposes.
The estimated time for completing this entire application is two hours and ten minutes, although you may not need to complete all parts. You are not required to respond to this collection of information unless it displays a currently valid OMB approval number.