Economic Injury Disaster Loans – Are Virginia Small Companies Eligible?
What is it?
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
- EIDL loans are 30 year term.
- The current rate of interest is 3.75%
- Interest accrues at on the date funds are issued.
- Repayment is deferred for 1-year from the date funds are issued. (You will not owe a first payment for 1-year).
- Loans are based on 6-months of operating expenses.
- Low credit scores must have a justification such as medical circumstance.
- Loans are based on ability of business to repay through cash flow.
- Maximum Working Capital Loan Amount is $2,000,000
- EIDL applicants are eligible for an immediate grant within three days of submitting the application of up to $10,000 for eligible entities.
I have an existing SBA Disaster Loan from a prior crisis.
Loan payments will be automatically deferred through December 31, 2020.
Summary Facts to know:
Tips that will make the process easier:
- Project loss for 3 – 9 months, and state why you chose that time frame.
- If you see a message pop up in a YELLOW box, SAVE your application immediately.
- Complete personal financial statement ahead of time. Scan and upload completed form.
- Be sure to check the box for ECONOMIC INJURY, not property damage.
- Accept loan offered for FULL amount. You can also make adjustments to the loan amount later.
- Apply as soon as your information is gathered. The process takes time, and it will be a while before you receive money.
- Apply even if you are not ready for the money. Once the application is approved, you have 6 months to determine if you need the funds.
- SBA goal is to get initial approval on loans in 18 to 21 days.
- If loan app isn’t complete, businesses will be asked for the additional information.
- SBA goal is to distribute funds within 1 week after getting final approval.
Documents that you will need:
- Business revenue numbers by month for the past two years, reported on SBA Form 1368.
- Business tax return for the last year filed. 2019 if you’ve completed it; 2018 otherwise. The tax return must include all schedules.
- Application–SBA Form 5 or SBA Form 5C (for sole proprietors)
- Personal financial statement—SBA Form 413-D. Please note that if you have partners, each partner who owns at least 20% of the business must complete this form.
- Schedule of business liabilities—Form 2202.
- Permission to request a copy of tax transcript from the IRS—Form 4506T. This must be completed by each owner with 20% of more interest in the business, as well as general partners and managing members.
- End-of-year profit and loss statement for 2019 and year-to-date profit and loss statement for 2020.
- End-of-year balance sheet for 2019.
- Copy of the most recent Federal tax return for each owner (20% or more), general partner, and managing member.
Links to forms:
SBA Form 5C (sole proprietors only): https://disasterloan.sba.gov/ela/Documents/Disaster%20Home%20Loan%20Application%20(SBA%20Form%205c).aspx
IRS Form 4506-T: https://www.irs.gov/pub/irs-pdf/f4506t.pdf
FEDERAL TAX FILING MOVED TO JULY 15, 2020 (not April 15, 2020)
Tax Day now July 15, Treasury, IRS extend filing deadline and federal tax payments regardless of amount:
Federal Tax Payments including Self Employment Taxes are now due on July 15:
VIRGINIA TAX FILING DEADLINE REMAINS ON MAY 1, PAYMENTS ARE EXTENDED TO JUNE 1
IMPORTANT COVID-19 LINKS FROM STATE AND NATIONAL RESOURCES
State of Virginia (very comprehensive):
Centers for Disease Control (business focus):
Department of Labor:
U.S. Chamber of Commerce:
U.S. Small Business Administration:
U.S. Internal Revenue Service:
Virginia Employment Commission:
Main Street America:
U.S. Department of Agriculture:
Government Loan Program Search Portal: