PrimeGlobal continues to monitor and assess new developments pertaining to the Novel Coronavirus. Keeping our members up to date on the latest information and approach to help reduce risk is a priority. You can find more information on PrimeGlobal's dedicated page HERE> PrimeGlobal member firm KROST details how to secure an SBA loan if your business is impacted by the Coronavirus (COVID-19).
As of Friday, March 13, 2020, President Trump declared a national emergency to combat the Coronavirus (COVID-19). Businesses across the nation may be suffering dramatic losses due to the unprecedented response to the virus. Health officials are recommending social distancing guidelines, and travel has severely decreased, among other restrictions, which has caused business to slow down in various industries. Now that a state of emergency has been announced, companies can request some loan assistance to ease financial losses incurred during this tumultuous time.
Note: Our location may not currently be included in the designated affected area, but the Governor’s office is currently working to designate the impacted areas.
Relief from Economic Injury
As businesses are encouraged to do what is necessary to keep customers and employees healthy, the U.S. Small Business Administration (SBA), is working with state officials to provide low-interest loans to those severely impacted by the Coronavirus. Small businesses and non-profits that qualify can receive up to $2 million in working capital loans during this time of revenue loss.
How to Secure an SBA Loan
The SBA has a 3-step process for applying for Disaster Loans.
- Apply for the Loan
- Applications can be submitted online here: https://disasterloan.sba.gov/ela
- Information verified – The verification includes a review of credit, estimate of the total loss, determination of eligibility, and guidance through the remaining process with a loan officer
(The verification process takes 2 to 3 weeks)
- Loan Closed and Funds Disbursed
(Once the application is approved it takes up to 5 days for funds to be disbursed)
What documentation is Required for the SBA Loan?
- Business Loan Application (SBA Form 5) completed and signed by business applicant.
- IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
- Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
- Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
- Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
Additional Information That May be Necessary to Process the Application
- Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
- 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 is acceptable.
- A current year-to-date profit and loss statement.
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.
Do You Need Assistance with the SBA Loan Application Process?
While the application process is only 3 steps, each step is time-consuming and could be overwhelming in an already difficult time. Don’t worry. We can help. Our accounting team is well-versed in the process and can guide your business through each step of the process. Contact us today to get started.
KROST Certified Public Accountants & Consultants
Established in 1939 in Pasadena, California, KROST, is a full-service Certified Public Accounting and Consulting firm serving clients across various industries. Our focus is recognizing opportunities and creating value for our clients by equipping them with the tools to make better business and financial decisions for the future. As trusted advisors, our clients depend on us to provide timely information, innovative solutions, and result-driven teamwork to ensure success.Learn more