The Small Business Administration (SBA) has implemented relief loans for businesses affected by the COVID-19 situation. Loans include Economic Injury Disaster Loans (EIDLs) to provide access to working capital, and SBA 7(a) Relief Paycheck Protection Program (PPP) to retain workforce through debt forgiveness for payroll and other eligible expenses during a defined covered period. The SouthStar Bank SBA Team is here to help and discuss available options for your business.
Businesses who may qualify include:
- Small businesses and private, non-profit organizations within designated disaster areas of a state or territory
- Businesses suffering substantial economic injury as a result of COVID-19
Economic Injury Disaster Loans (EIDLs)
The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the Coronavirus disaster not occurred. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
To apply for an EIDL, visit disasterloan.sba.gov/ela.
Required documentation includes:
- Completed SBA loan application (SBA Form 5)
- 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)
- Other Information that may also be requested:
- Complete copy, including all schedules, of the most recent Federal income tax return for principals, general partners or managing member, and affiliates (see filing requirements for more information)
- If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
- A current year-to-date profit-and-loss statement
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures
SBA 7(a) Relief Paycheck Protection Program (PPP)
The CARES Act increased the maximum 7(a) loan amount to $10 million and expands allowable uses of these loans to include payroll support (including paid sick or medical leave), employee salaries, mortgage payments, insurance premiums and any other debt obligations.
SBA 7(a) Relief applications will be processed through your local SBA lender. Even though the CARES Act has passed, the SBA has up to 30 days to implement the legislation and provide Banks with guidance on the application process. Until guidance is provided and we can accept a formal application, you are encouraged to begin gathering documentation.
Initial documentation includes:
- Payroll records for all employees from 3/1/19 – today
- 2 years business tax returns- all schedules
- YTD Income Statement, Balance Sheet, Debt Schedule
of the following paid since 2/15/20 broken out by month
- Interest on business related mortgage debt
- Number of full time employees
From the U.S. Senate Committee on Small Business & Entrepreneurship: Download a comprehensive guide to help small business owners and entrepreneurs better understand the new programs that will soon be available under the CARES ACT.
SBA loans offer key advantages over most traditional loans and can be particularly beneficial during these trying time. As an SBA Preferred Lender, SouthStar Bank is here to help guide you through the process. Get the support and advice you need, along with streamlined processing handled by a team of experts who care about your business. Contact us today: email@example.com or 512.456.0035.
Senior Vice President / Regional Credit Manager / SBA Director
512.456.0035 | firstname.lastname@example.org
Vice President & Branch Executive
512.456.0035 | email@example.com