Today, in response the Coronavirus outbreak (COVID-19) and to minimize the economic disruption of the nation’s 30 million small businesses, the U.S. Small Business Administration (SBA) issued revised criteria for states and territories seeking an economic injury declaration related to the COVID-19 pandemic. The relaxed criteria will have two immediate impacts:
- Faster, Easier Qualification Process for States Seeking SBA Disaster Assistance. Under the just-released, revisedcriteria, states or territories are only required to certify that at least five small businesses within the state/territory have suffered substantial economic injury, regardless of where those businesses are located.
- Expanded, Statewide Access to SBA Disaster Assistance Loans for Small Businesses. Additionally, under the revised, disaster assistance loans will be available statewide following an economic injury declaration. This will apply to current and future disaster assistance declarations related to Coronavirus.
LEWIS & CLARK DEVELOPMENT GROUP’S ROLE
The application process is online and is relatively straight-forward. Lewis & Clark Development Group is available to answer questions, provide technical assistance, and help small businesses in putting their applications together.
Applicants may contact Lewis & Clark Development Group at (701) 667-7600 and are encouraged to visit www.lcdgroup.org.
Further information about the process, loans, and necessary documentation is as follows…
ABOUT THE PROCESS & LOANS
Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, an Economic Injury Disaster Loan declaration, which will make loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by COVID-19 pandemic.
- 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. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
NECESSARY DOCUMENTS BUSINESSES WILL NEED
Business can start preparing information for the application. These are some of the documents they may need:
- 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 YOUR 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.
MORE IMPORTANT INFORMATION MAY BE FOUND HERE: