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.
BUSINESS RECOVERY RESOURCES
As Virginia businesses and communities look forward to safely reopen, the Virginia SBDC network and Alexandria SBDC have developed the Business Recovery webpage to help owners carefully plan for and execute their businesses’ new strategy.
These detailed guidelines cover a broad range of critical considerations. While business owners can use them by themselves, they were designed to ideally be used in collaboration with Alexandria SBDC’s Business Analysts. The guidelines are set forth in three sections: REVIEW, REOPEN and RECOVER. As a first step, we encourage you to carefully examine the questions and resources under each section. At that point, contact Alexandria SBDC at email@example.com to schedule a virtual meeting with an Alexandria SBDC expert consultant for objective feedback on your questions and ideas. As a reminder, all services of Alexandria SBDC are without cost.
The Alexandria SBDC’s confidential one-2-one consultations have a solid track record of helping business owners through such deliberations. We also have contacts in the community that can help you make opportune connections.
PAYCHECK PROTECTION PROGRAM (PPP)
The PPP program provides 100% federally guaranteed loans for payroll costs (including benefits), interest on mortgages, rent, and utilities. The benefits of this program include:
- Keeping Employees on the Job – loans cover 2.5x average payroll for a period of 8 weeks
- 100% Forgivable – loans will be fully forgiven as long as loans are used for payroll and other approved costs, and employee and compensation levels are maintained.
- Contact your bank to determine 3 key things:
- Verify that they are accepting PPP applications – if they are not, find a lender that is.
- When they are accepting applications – some banks are delaying the opening for applications so confirm the date
- How the application process will work – each bank will have a unique process
- Complete the two-page application
- Submit your application to your bank or another SBA 7(a) lender in accordance with their application procedure
- To find a lender in your area, search https://www.sba.gov/paycheckprotection/find
Important Things to Know about the PPP Program
- Small Businesses with fewer than 500 employees or that otherwise meets the SBA’s size standard
- A 501(c)(3) with fewer than 500 employees
- An individual who operates as a sole proprietor, independent contractor, or who is self-employed who regularly carries on any trade or business
- A 501(c)(19) Veterans Organization that meets the SBA size standard
Application: complete the Paycheck Protection Program loan application which is available here.
Supporting Documents: provide your lender payroll documentation.
Loan Amounts: applicants may only apply for one (1) loan. Loan amounts can be up to 2.5x average monthly payroll costs with a cap of $10 million.
- For Employers:
- Salary, wage, commission, or similar compensation;
- Payment of cash tip or equivalent;
- Payment for vacation, parental, family, medical, or sick leave
- Allowance for dismissal or separation
- Payment required for the provisions of group health care benefits, including insurance premiums
- Payment of any retirement benefit
- Payment of state or local tax assessed on the compensation of the employee
- For Sole Proprietors, Independent Contractors, and the Self-Employed:
- The sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in one year, as pro-rate for the covered period.
- Payroll Exclusions:
- Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period February 15, to June 30, 2020
- Payroll taxes, railroad retirement taxes, and income taxes
- Any compensation of an employee whose principal place of residence is outside of the United States
- Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116-5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act.
Number of Jobs: applicants should include the number of Full-Time Equivalent employees under the Jobs section of the application.
Loan Forgiveness: borrowers are eligible to have their loans forgiven. They will submit a request to their lender that includes documentation that verify the number of full-time equivalent employees and pay rates, as well as the payments on other eligible expenses. Loan forgiveness will be reduced if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees.
Additional Assistance: we encourage you to contact your bank or lender with questions about the application. General updates will continue to be shared and posted to AEDP’s COVID-19 webpage, or you can email the Alexandria SBDC at firstname.lastname@example.org.
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 for businesses with 10 employees and lesser amounts for those under 10.
- What is it: up to $10,000 ($1,000 per employee) advance payment for those applying for EIDL loan. Does not need to be repaid under any circumstance
- Who can apply for it: Businesses, self-employed; independent contractors; 501(c)(3) nonprofits
- How do you apply for it:
- Online application: https://covid19relief.sba.gov/#/
- EIDL application step-by-step video (13 minutes)
Note: EIDL Program temporarily suspended
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 $15,000; Based on 2 months operating expenses (as of 4/9/20)
- 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 email@example.com 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 Microsoft Edge, 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
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