Small Business Administration Disaster Relief Loan for Small Businesses

Per recent legislation by Congress, the Small Business Administration is making a Disaster Relief Loan 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.

Here are some quick talking points for you to consider:

Website to apply for the loan: https://disasterloan.sba.gov/ela/ (Forms can be downloaded at the bottom of this page.)
This is for working capital it is not designed for expansion or debt consolidation.
This loan process will be done by the Small Business Administration. It is not process through your bank or credit union.
Definition of Economic Injury by the SBA
- Here is what is meant by ECONOMIC INJURY for purposes of any SBA loan to be provided, once the COVID 19 declaration is done for TN:
- “Businesses can only seek assistance for economic injury (not physical damage) as 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 to pay its ordinary and necessary operating expenses.
- Establishing economic injury is a comparison between the financial information from the period in 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 local 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 state officials are asking or ordering businesses to temporary close or reduce services (e.g., take out only)] and the business [will] not able to be re-established for two months, the business should consider how long it will take for things to normalize.
- If it’s three months, the analysis [for a 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 the economic injury is considered substantial.”

Any additional questions go to the SBA customer service line at 1-800-659-2955
TN Counties presently approved as of 3/19 at 11:30am:(Hamilton, Marion, Polk, Bradley, Blount, Carter, Cocke, Greene, Johnson, Monroe, Polk, Sevier, Unicoi – All of Tennessee will be declared soon.)

All Businesses should apply (that are eligible)
Tennessee has completed the documentation process and we are presently awaiting SBA approval within the next 24-48 hours.
Loans are set at an interest rate 3.75% with a maximum term of 30 years.
First year’s payments will be deferred (tbd)
Any loan request over $25,000 will require collateral
It is recommended that the client download the documents first and hand complete all necessary before completing online.
Filling the application out completely is key to successful processing
Underwriting will take 2-3 weeks for underwriting then another 7-10 days for documentation & disbursement – with a FULL & COMPLETE Application.
Important criteria for the loan

1) A complete and accurate loan package

2) SELA0-Business Loan Application (SBA 5)ubmitted electronically (sending in paper doc will slow it down)

3) Request as much as you think you might need. Asking for more money will be more difficult rather than asking for more

4) They will review cash flow (built into the application)

5) Credit requirements will be relaxed.