Last updated on April 28th, 2020 at 02:26 pm
The Small Business Administration Economic Injury Disaster Loan program is now available to small businesses that have been affected by the coronavirus COVID-19, Gov. Tony Evers announced Friday.
The U.S. SBA approved Evers’ request for federal loan assistance, which gives small business access to loans of up to $2 million with lowered interest rates and repayment plans of up to 30 years.
Businesses can apply here. Here’s a list of documents needed to apply:
- Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
- Complete copies of the most recent Federal Income Tax Return.
- Schedule of Liabilities (SBA Form 2202).
- Personal Financial Statement (SBA Form 413).
- Profit and loss statements
- Monthly sales figures (SBA Form 1368)
Companies that have been in business under a year can use their personal tax returns if they don’t have business tax returns yet (the loan requires a personal guarantee) and they can also make projections, said Shirah Apple, public affairs specialist at the Wisconsin SBA.
From the time businesses apply for the EIDL loan, it will take 18 to 21 days to process the loans and 2 to 5 days to disburse the funds, said Robert Scott, U.S. SBA regional administrator.
“I do know the SBA administrator and along with (Trump’s) administration overall is doing everything they can to cut those times down because we know the small business community is hurting right now,” Scott said.
The SBA’s Economic Injury Disaster Loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the coronavirus impact. 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-profits is 2.75%.
Any business that currently has an SBA loan can work with their lender to request up to a six-month deferral on payment of that loan. Businesses who are approved for the EIDL loan can defer payments of that loan by up to a year.
The U.S. SBA is required to reach out to businesses who have been denied the EIDL loan, within 48 hours, to either put them in a position so they can reapply for the EIDL loan, or offer them other alternatives, Scott said.
Scott also noted on a call with the media Saturday that Sen. Marco Rubio, R-Florida, who is chair of the senate small business committee, is working on legislation that would allow lenders to use the express line to quickly approve SBA-backed loans, he said.
“There are a lot of lenders out there that can certainly approve a business and turn it in 3 to 5 days,” Scott said. “I know that legislation is working its way through congress.”
Scott also encouraged business owners to check in with their local SBA and lending institutions to explore what options are out there for financial support.
“There are lending institutions that are stepping up to help those small business owners,” Scott said. “If you’re a small business owner, the EIDL loan is definitely an option and I would certainly want any person to apply for it, but it should not be the only path they go.”
Despite Evers’ stay-at-home order issued today, financial institutions will remain open and continue to service clients.
“The most important thing for the public to understand is that your money is safe and sound in a bank or a credit union,” said Eric Skrum, Wisconsin Bankers Association communications manager. “Deposit insurance covering at least $250,000 per person ensures the security of consumers’ funds.”
In fact, Wisconsin banks have been proactively reaching out to customers and businesses, offering assistance in the form of fee waivers, loan payment deferral programs, credit card payment relief, suspension of foreclosure and repossession programs and more.
Mortgage volume at all financial institutions is high right now with the current low rate environment experienced across the country.
“These volumes occurring at the same time as the COVID-19 outbreak are resulting in some delays in the process,” Skrum said. “So, consumers need to be patient as they work with their local banker to either purchase a new home, or refinance their existing mortgage.”
Click here to access an interactive map of available bank lobbies and drive-through currently open in Wisconsin.