SBA DISASTER LOANS – IMPORTANT TO READ RIGHT NOW
- Payback is 10 years at 4% for EIDL
- Payback is 2 years at 1% for PPP
- Loan forgiveness is under PPP only for Payroll Rents, Utilities, and Mortgage Interest paid from 4/1/2020 to 6/30/2020.
The Economic Injury Disaster Loan Program (EIDL) is with the SBA directly and will get you a loan and includes a $10,000 emergency loan.
NOTE: many sites are claiming the $10,000 loan is free money because it will be forgiven, but there is another step to be taken to make it free (see below).
IT IS DEFINED BY THE SBA AS AN ADVANCE ON THE EIDL LOAN — NOT FREE MONEY!
Go to https://covid19relief.sba.gov/#/ and file this form as soon as possible.
NOTE: We are told the SBA only supports the web browser internet explorer
For help filling out the EIDL loan, please call the SBA Office of Disaster Assistance at 1-800-659-2955
BE CAREFUL AND DON’T GO TO ANY OTHER SITE WHICH MAY BE A SCAM/HACKED SITE!
There have already been reports of an sba.com site trying to steal banking information!
Make sure you download the following forms and fill them in as soon as possible:
- Personal Financial Statement
- Authorization to get IRS tax transcripts
- Schedule of Liabilities
- Additional filing requirements.
Although these are optional, they can speed up the process.
I have been asked where these forms are: I don’t know yet.
Payroll Protection Program (PPP) loans.
The second loan, called PPP for Payroll Protection Program, is through your bank or SBA authorized lender. This is a more detailed program and has a provision to forgive up to 2.5 times your costs for payroll and other expenses. This is the program that will have you deduct the EIDL $10,000 grant against this loan.
The dates available for this loan are April 3, 2020 for small businesses and sole proprietors, and April 10, 2020 for independent contractors and the self-employed.
Note: Small businesses are corporations and LLCs. Sole proprietors are single-member LLCs and other single-owner businesses.
The interest rate is 1%. The term of the loan is ONLY 2 years.
Delayed payments are allowed for 6 months, but interest continues to accrue.
Check with your bank if they are an SBA certified lender.
For details of the regulations put forth by the SBA and what qualifies, see this: PPP–IFRN FINAL
If you decide you cannot do it yourself, we may be able to help you with the PPP application and the follow-up required to prove the loan forgiveness.
We will only provide this service for our clients who keep a good set of books with a real accounting system such as Quickbooks or another service that provides a profit and loss report and a balance sheet. If your records consist of compiled receipts, we cannot help you.
This service will not guarantee you get the loan, and we won’t be responsible if the SBA or the SBA lending banks reject your loan.
For the definition of payroll costs, see this post: SBA LOAN DEFINITIONS
Read this post to see if the PPP loan is right for you: IS THE PPP LOAN FOR YOU?
You can fill out the PPP application form here: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
See the following details from the IRS regarding the SBA’s Paycheck Protection Program: PPP Fact Sheet
Fox61 Connecticut also has a great article called “GUIDE to Small Business Administration Loans”
Keep checking back here for more COVID-19 Tax Updates and FAQs.