Economic Injury Disaster Loan Application and Potential Expansion of SBA Lenders’ 7(a) Authority
As you know, Congress and the Administration are contemplating different ways to make the application for an Economic Injury Disaster Loan (EIDL) easier and/or to expand the 7(a) authority of Small Business Administration (SBA) lenders to use their delegated authority to process 7(a) loans during the crisis. I am hopeful that this will include allowing SBA preferred lenders to process EIDL applications as well.
The SBA website is severely taxed, making it hard to download information or use the site’s online application process.
I have been sharing the following forms freely:
- SBA Disaster Assistance in Response to the Coronavirus
- Personal Finance Form – Disaster Programs
- Schedule of Liabilities
- Disaster Request for Transcript of Tax Return
This list contains what is necessary to apply for an EIDL and also includes the fee disclosure form in case you want to share with someone who would like to supply a packaging service, which is something we do as well. There is no requirement that anyone use an attorney or consultant to apply for an EIDL.
Below is the simple information, which I received from the SBA, that I have been sharing. Feel free to consider me a sounding board on any ideas that you might have.
Economic Injury Disaster Loans (EIDLs) are potentially available to eligible small businesses that are suffering economic injury as a result of the health crisis caused by COVID-19 so long as the state in which the business is situated has declared a State emergency. These loans are at a low interest rate (3.75%) with long term amortizations (up to 30 years). Loan amounts can be up to $2 million. These loans require a demonstration of need, including that credit is not available elsewhere, and the length of the loan term(s) will be determined on a case-by-case basis.
Here is the link to get started on exploring whether an EIDL can help your business during this time. You can also contact the SBA disaster assistance customer service center by calling 1-800-659-2955 (TTY: 1-800-877-8339) or emailing email@example.com.
There is no requirement that any business use the assistance of an attorney or consultant to facilitate the packaging and submission of an EIDL package. However, if anyone would like assistance or recommendations of services that provide assistance, please feel free to reach out to us.
Finally, if you currently have an SBA loan (or a conventional loan), I encourage you to reach out to your lender to ask about deferring your principal and interest payments. SBA lenders have been encouraged to grant these requests. An SBA lender can typically grant between a 90-day and six-month deferment depending on the circumstances.
For more information, contact Thomas Kent, Jr., or the Stevens & Lee attorney with whom you typically work.
This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.