SBA Disaster Loan Recommendations
Thank You Larimer County Small Business Development Center for these recommendations.
Public health steps to minimize the COVID-19 virus, including mandated business closures, will obviously be a hardship for many small business owners. Newly released SBA disaster loans, or EIDL (Economic Injury Disaster Loans), are now available, and Colorado businesses may apply. Successful applicants can receive loans up to $2M, with loan amounts over $25,000 requiring supporting collateral. The link is: https://disasterloan.sba.gov/ela.
It’s strongly recommended the loan application be done online, but some advance preparation will really help. Below are links and information to six PDF’s that show the information the applicant will be asked during the application. The applicant will be much better prepared to complete the on-line application IF he/she gathers the information first, before starting the on-line process!
Here are the PDF’s, and their titles:
- SBA Form 5, Disaster Business Loan Application – Similar to a bank loan application. You’re applying for an “Economic Injury (EIDL)” loan, not a “physical damage” loan. Have all of your organizational entity info ready. All owners of 20% or more will need to complete this.
- IRS Tax Form 4506-T, and “Instructions for Completing IRS Tax Authorization Form 4506T” – Authorizes the IRS to provide your federal tax info directly to the SBA. Read both parts carefully! If you have 50% or more ownership in other businesses, you may be required to release that tax info also.
- SBA Form 413D, Personal Financial Statement Disaster Programs – Have a breakdown of your personal liabilities and assets, including real estate assets. All individuals with 20% or more ownership will need to complete this.
- SBA Form 1368, Monthly Sales Figures – Collect your monthly sales ( top-line revenues) for the last three years. Query quickbooks if you use it, or ask your bookkeeper, but get this data! It’s important because it will show the loan reviewer what your historical monthly sales were, and what they have dropped off to now. It’s a key determinant of your economic loss! This section will also let you submit any info that shows your economic hardship, including a financial forecast.
- SBA Form 2202, Schedule of Liabilities – Gather all the upcoming financial obligations you have. Bank loans, lines of credit, leases, accounts payable, insurance payments, payroll, whatever you owe.
- Have digital versions of your last three years of financials ( income statement and balance sheet) available, plus year-to-date financials.
- While the application can be “saved”, I recommend that you try to find an uninterrupted 2-3 hour block of time to work through the application. Your focus and “flow”, through the application will be more effective.
- If you pay someone do this application for you, they may need to complete SBA Form 159D,