We understand that there is a lot of uncertainty and many questions at this time. There are also many resources and a lot of information coming out. In order to best serve the small businesses of Alexandria, we will be compiling information and resources for small businesses on this page. We will update this page regularly, with as much up-to-date information as possible.
The below information has been updated to reflect that the Economic Injury Disaster Loan (EIDL) and EIDL Grant programs have been expanded by the CARES Act.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
- Submit EIDL application, ask for the advance—check box on EIDL application
- Up to $10,000 3-days after submitting an EIDL application
- Does not need to be repaid under any circumstance
To apply for a COVID-19 Economic Injury Disaster Loan and EIDL Grant, click here.
ECONOMIC INJURY DISASTER LOANS (EIDL)
- Businesses with up to 500 employees in operation as of Feb 15, 2020
- Nonprofit organizations with fewer than 500 employees – 501c, d, e
- Independent contractors and sole proprietors
Loans from SBA directly
- Waives personal guarantees and 1-year in business for advances and loans under $200,000
- Do not need to have sought capital elsewhere for advances and loans under $200,000
- No collateral for $25k or less
- Up to 12 month deferral
- Working capital loan up to $2 million; Based on 6 months operating expenses
- Term 30 years, 3.75%
Uses for the loan proceeds include:
- Payroll, working capital, operating expenses
Alexandria SBDC Tip Sheet for EIDL Loans (related to COVID-19)
You might notice as you review this Tip Sheet and the EIDL Application itself that this is a much less stringent process than the usual loan application. SBA is trying very hard to approve this loan for a broad range of borrowers. Please follow the guidelines carefully.
Disaster # for Virginia is: VA-00087
- Applicants may apply online and receive additional disaster assistance information at https://covid19relief.sba.gov/#/.
- Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email firstname.lastname@example.org for help in completing the application process.
- Paper-based application materials may be downloaded for printing at https://disasterloan.sba.gov/ela/Information/PaperForms.
- We highly recommended that you download and complete the paper forms to make sure that you have all of the information required and then apply electronically. You will need to have access to a scanner in order to upload many of the documents required. Recheck the filing requirements to ensure that all the needed information is submitted.
Other key information:
- Use Internet Explorer or Mozilla Firefox to apply.
- Write your password down (or remember it!). You’ll likely need to access the system again.
- Remember to unlock any credit agency file(s) that you may have locked so that SBA will have access
- The ‘Help Button’ provides useful information for each page.
- Use the ‘Save Button’ frequently.
- Be patient and keep trying if you experience slow load times.
If your loan request is denied, you can provide more information.
What is the criteria for a loan approval?
- Credit History-Applicants must have a credit history acceptable to SBA.
- Repayment –SBA must determine that the applicant business has the ability to repay the SBA loan.
- Eligibility– The applicant business must be physically located in the declared disaster area and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons. The applicant business must have a physical presence in the declared disaster area. An applicant’s economic presence alone in a declared area does not meet this requirement. The physical presence must be tangible and significant. Merely having a P.O. Box in the disaster area would not qualify as a physical presence.
- The SBA has encouraged all to apply, even if you are not sure if you meet all of the requirements.
How these loans are different
- SBA’s Economic Injury Disaster Loan (EIDLs) funds come directly from the U.S. Treasury.
- Applicants do not go through a bank to apply. Instead apply directly to SBA’s Disaster Assistance Program at: https://covid19relief.sba.gov/#/
- There is no cost to apply.
- There is no obligation to take the loan if offered.
- Loans up to $25,000 do not require collateral.
- Applicants can have an existing SBA Disaster Loan and still qualify for an EIDL for this disaster, but the loans cannot be consolidated.
Note: There will be a 1 – year deferment period before repayments will begin.
What are the collateral requirements?
- Economic Injury Disaster Loans over $25,000 require collateral.
- SBA takes real estate as collateral when it is available.
- SBA will not decline a loan for lack of collateral,
but requires borrowers to pledge what is available.
What do I need to file?
- Completed SBA loan application (SBA Form 5 or Form 5C, if a sole proprietorship).
- 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 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. (This is especially important for Economic Injury Disaster Loans.) This information could also be provided in another format, such as a QuickBooks report.
If you have technical issues, you may still apply using paper and mail the complete package to SBA:
- U.S. Small Business Administration Processing and Disbursement Center
14925 Kingsport Road
Fort Worth, TX 76155
The biggest reason for delays in processing is due to missing information. Make sure to complete all filing requirements before submitting the application and forms. Approval decisions generally take 21 days from receipt of a fully completed loan application package.
SBA EIDL Application Process Webinar
The Virginia SBDC is providing a step-by-step recorded webinar on completing the SBA Economic Injury Disaster Loan (EIDL) Form. We recommend that applicants listen to this webinar before completing the application.
EXPRESS BRIDGE LOAN PILOT PROGRAM
- For businesses with an existing relationship with an SBA Express Lender
- Up to $25,000
- Fast Turn around
- Will be repaid in part or full by proceeds from the EIDL Loan
SMALL BUSINESS DEBT RELIEF PROGRAM
- Immediate relief to small businesses with non-disaster SBA loans
- SBA will cover payments for six months.
- Also be available to new borrowers who take out loans within six months of the President signing the bill into law
PAYCHECK PROTECTION PROGRAM (PPP)
Note: more information on how to apply at banks is coming soon.
- Businesses with up to 500 employees in operation as of Feb 15, 2020
- Nonprofits, independent contractors and sole proprietors
- Loans from SBA approved banks, credit unions, and some nonbank lenders
- No collateral; no personal guarantees; do not need to have sought capital elsewhere
- Loan Amount
- 2.5 times monthly payroll expenses Feb 15, 2019 – June 30, 2019, up to $10 million
- Uses for the loan proceeds include:
- Qualified payroll costs; rent; utilities; and interest on mortgage and other debt obligations.
- Loan Forgiveness
- For funds used to pay 8 weeks of payroll (excluding salaries in excess of $100,000)
- 8 weeks begins on the loan origination date
- Loan amount that is not forgiven
- Max interest rate is 4% and max term is 10 years
- Principle and interest deferred for 6-12 months after disbursement of the loan
The Small Business Owner’s Guide to the CARES Act PPP can be found here.
SMALL BUSINESS TAX PROVISIONS
Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship
- Refundable payroll tax credit for 50% of wages
Delay of Payment of Employer Payroll Taxes
- 2020 Payroll tax deferment until December 2021 and December