NARI: Details of Emergency SBA Loan Program
EVANSTON, Ill. (Qualified Remodeler) — The Small Business Administration recently announced a working-capital loan program to help alleviate the impacts of the Covid-19 disruption. The Government Affairs committee of the National Association of the Remodeling Industry, NARI, offered a summary of the program and links for remodelers and home improvement companies if they want to apply for those loans. Here is the summary from NARI sent March 20, 2020.
The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
Examples of eligible industries include but are not limited to: hotels, recreational facilities, charter boats, manufacturers, sports vendors, owners of rental property, restaurants, retailers, souvenir shops, travel agencies, and wholesalers. Some industries that are ineligible include agricultural enterprises, religious organizations, charitable organizations and certain gambling-related businesses.
These SBA loans are available to small businesses that meet the following criteria:
- Credit history – Applicants must have a credit history acceptable to SBA.
- Repayment – SBA must determine that the business has the ability to repay the loan.
- Eligibility – The business must be physically located in a declared county and suffered working capital losses due to COVID-19, not due to a downturn in the economy or other reasons.
Eligible entities may qualify for loans up to $2 million based on size and type of business and its financial resources. Interest rates are 3.75% for small businesses and 2.75% for nonprofits with terms up to 30 years. Loans over $25,000 require collateral such as real estate or borrowers pledge in the absence of collateral.
While the loans are not intended to replace lost sales or profits or provide for expansion, they may be used to pay fixed debts, payroll, accounts payable, and other bills.
There is no cost to apply and no obligation to take the loan if approved. Also, the amount of loan requested can be either increased or decreased after an application is submitted. To apply, you should go directly through the SBA’s Disaster Assistance Program at: https://disasterloan.sba.gov/ela/
Applicants should be prepared to submit the following:
- Completed SBA loan application (SBA Form 5 or 5C)
- Tax Information Authorization (IRS Form 4506T) for the business, principals and affiliates
- Complete copies of the most recently filed Federal Income Tax Return
- Schedule of Liabilities (SBA Form 2202)
- Other information may be requested
It is recommended that applications are submitted as soon as possible. Ensure that all items requested are included to prevent delay in processing.
The team at SBF is available to help you gather any required tax-related documents and financial statements. Please contact them at (727) 888-9200 or firstname.lastname@example.org.