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Please see details below regarding Disaster relief Funding through the SBA. 

 Go to the website below to apply or email flcchamber@fpunet.com for a copy of the loan to be sent to you.

 Website to apply for the loan is :

https://disasterloan.sba.gov/ela/

 Recent legislation by Congress, in association with the Small Business Administration (SBA), is making a Disaster Relief Loan (Economic Injury Disaster Loan, or EIDL) available to almost all Small Businesses.  The SBA will be lending up to $2 Million to businesses at a 3.75% fixed interest rate with a repayment of up to 30 years. The interest rate for non-profits is 2.75%. Applying online will be the best, most efficient method to get your loan in-process. Applications submitted by physical paper forms will be subject to delays due to additional processing and transmission time.

 AS A REMINDER-IMPORTANT INFORMATION REGARDING THE LOANS AND LOAN PROCESS:

 This loan is for working capital - it is not designed for expansion or debt consolidation.

  • This loan process will be done bey the SBA’s Office of Disaster Assistance and funds will be issued directly from the US Department of Treasury. It is not a process through your bank or credit union.
  • In order to qualify for a loan, the business needs to have sustained an economic injury. The SBA defines an economic injury as follows:
  • Businesses can only seek assistance fro economic injury a s a result of the incident [COVID-19} Substantial economic injury occurs when a business concern is unable to meet its obligations as they mature or pay its ordinary and necessary operating expenses.
  • Establishing economic injury is a comparison between the financial information from the period to the prior year to the injury period of the current year - this period must be associated to the IMPACT OF COVID-19 and cannot be attributed to a downturn in economy or other unrelated issues
  • For example, if employees are unable to work or major conferences cancelled from which the business received revenues; or if a restaurant experiences substantial reduction in customers due to social distancing or because local or stat officials are asking or ordering businesses to temporarily close or reduce services (such as take out only), and the business will not be able to re-establish for two months, the business should consider how long it will take to normalize. 
  • If it is three months, the analysis for the loan would show the financial data for the same three months of last year and the anticipated financial data for the same period this year. The loans are not intended to replace lost sales or profits rather they are intended to pay fixed debts, payroll, accounts payable and other expenses that could have been paid had the impact of COVID-19 not occurred. Analyzing a drop in sales, the length of time the business will be impacted, the type of business and typical business cycle of the industry, provides the SBA loan officers with the requisite data needed to determine if economic injury is considered substantial. 

 

**Underwriting for the loan may take 2-3 weeks for processing and then another 7-10 days for documents and disbursement. - this timeline assumes a FULL & COMPLETE application. Any additional information needed may extend the process.

IMPORTANT CRITERIA FOR THE LOAN

  • A complete and accurate loan application and required documentation
  • Submitted electronically (paper documents sent by post office will slow down the process)
  • Request as much as you think you might need. Asking for more money down the road will be more difficult rather than asking for more money up front.
  • The loan processors will review cash flow (built into the application)
  • Credit requirements will be relaxed
  • Use applications such as SCANNABLE or TURBOSCAN to scan documents as necessary.
  • Have the following available:
                 Business information
                 Contact information and Social Security numbers to all applicants
                 EIN for business applicants
                 Insurance Information

                 Financial Information (10 months worth of total payments due for debts-mortgages, student loans, credit cards)        

** Use Internet Explorer or Mozilla Firefox to apply. 

** Take use of the “HELP” button

** SAVE frequently - due to many applications

** Be patient with slow load times

 

WHAT’S NEXT? EXPECTATIONS?

  • You will receive email confirmation that your application has been submitted.
  • You will receive an email stating it is under review.
  • BE PREPARED someone from SBA will contact you.
  • Have monthly expenses and projections ready. 

 

 

Application Filing Deadline: December 21, 2020 

 

Disaster Loan Assistance Available: 

Economic Injury Disaster Loans (EIDLs) – Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period. 

Credit Requirements: 

• Credit History – Applicants must have a credit history acceptable to SBA.
• Repayment – Applicants must show the ability to repay the loan.
• Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. 

SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available. 

Interest Rates: 

The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 3.750 percent. 

Loan Terms: 

The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term. 

Loan Amount Limit: 

The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit. 

Loan Eligibility Restrictions: 

Noncompliance – Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain required flood insurance and/or hazard insurance on previous SBA loans. 

Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility. 

Refinancing: 

Economic injury disaster loans cannot be used to refinance long term debts. 

Insurance Requirements: 

To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of 1) the total of the disaster loan, 2) the insurable value of the property, or 3) the maximum insurance available. 

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.govfor more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339. Completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

© 2018 Fayetteville, TN 110 Elk Avenue South, Fayetteville, TN 37334 | (931) 433-6154  Photos by Paul Henry, Elk Valley Times

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