Loan Program for COVID-19

We hope that you are faring well and staying healthy during this time. The COVID-19 virus has had a significant impact upon businesses and we have been looking for ways to help ease the financial stress on our clients. One program that we have identified is the Economic Injury Disaster Loan (EIDL) program through the U.S. Small Business Administration (SBA).

This program offers loans up to $2,000,000 for working capital to help small businesses and most private, non-profit organizations meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. Most parts of Pennsylvania, New Jersey, Maryland and Delaware, along with many other areas of the country, have been declared “disaster areas” with respect to COVID-19 and the EIDL loans are available in these areas. 

If your business has suffered economic injury as a result of the COVID-19 virus, and you would like to explore the EIDL program, please contact us. We can assist you in evaluating whether this program is right for your business. If it is, then we can guide you through the process from the initial application through closing. 

If you would like further information, please contact Eric Raymond CEO ThePEOPeople.com at (888) 8THEPEO or click here to set up a quick meeting.

Below is a summary of the application process. This memo is intended only as a summary and does not constitute legal advice. It should not be relied upon as legal advice. Please contact one of our attorneys if you require legal advice.

SBA Economic Injury Disaster Loan Program for COVID-19 Summary of Application Process

The basic application for the SBA’s Economic Injury Disaster Loan (EIDL) program for small businesses consists of: (1) the SBA Form 5, which is the base application and includes the basic information about the applicant; (2) the SBA Form 413, on which the applicant and certain owners will provide personal financial statements; and (3) the SBA Form 2202, on which the applicant will disclose its financial liabilities. In addition to the information on the applicant, much of the same information will be required for any owner that owns more than 20% of the business, and for all general partners of limited partnerships and managers of limited liability companies.

Your organizational documents will provide much of the information that we will need to assist you with the SBA Form 5 and allow us to identify all of the owners that are required to provide their personal information. Please provide us with the following documents:

Corporations:

  • Articles of Incorporation
  • Bylaws
  • Stock Register
  • Employer Identification
  • Any Fictitious Name Registration

Limited Liability Companies:

  • Certificate of Organization
  • Operating Agreement
  • Employer Identification Number
  • Any Fictitious Name Registration

Limited Partnerships:

  • Certificate of Limited Partnership
  • Limited Partnership Agreement
  • Employer Identification Number
  • Any Fictitious Name Registration
  • General Partner Information (depending on GP organization type)

Whether or not the SBA considers a business a “small business” for the purpose of eligibility for the EIDL is determined on an industry by industry basis. Depending upon the industry, the standard may be based upon the business’s total revenues, the number of employees, or the total assets held by the business. In order to determine a business’s eligibility, the SBA will consider the combined revenues (or, as applicable, employees or assets) of the applicant combined with all foreign or domestic affiliates. The SBA provides a tool to determine the standard for your industry. You will need to know the NAICS code for your business. The SBA’s tool can be accessed at: https://www.sba.gov/size-standards/. If you do not know your business’s NAICS code, you can find it at: https://www.census.gov/eos/www/naics/.

Each of the forms you will need to complete are attached. The SBA Forms 413 and 2202 require detailed financial information for both the applicant and owners with an interest of more than 20% of the applicant.

We will also need to specify how your business has been economically injured by the COVID-19 pandemic. The EIDL’s are authorized under a disaster relief program and are available only to provide relief to small businesses suffering from that disaster in areas where a disaster has been declared. The COVID-19 pandemic has been declared a disaster in most areas of Pennsylvania, New Jersey, Maryland and Delaware, as well as many other regions of the United States.

Once the forms are complete, we will submit them on your behalf and act as a representative with the SBA to make the application process go smoothly. If and when your application is approved, we will provide you with representation through the process of reviewing, and where necessary, revising the SBA loan documents, all the way to the closing of your loan.

Documents that we will need to submit with your application include:

Applicant:

  • Completed SBA Form 5
  • Completed SBA Form 413
  • Completed SBA Form 2202
  • Completed IRS Form 4506T
  • Complete copy (with all schedules) of the most recent Federal income tax return*
  • Current year to date profit and loss statement
  • IRS Tax Exempt Certification (if applicable)

Owner of 20% or more of Applicant:

  • Completed SBA Form 413
  • Completed IRS Form 4506T
  • Complete copy (with all schedules) of the most recent Federal income tax return*

General Partners and Managers:

  • Complete copy (with all schedules) of the most recent Federal income tax return*
  • Completed SBA Form 413
  • Completed IRS Form 4506T
  • Complete copy (with all schedules) of the most recent Federal income tax return*

* If the most recent Federal income tax return has not yet been filed, a year-end profit and loss statement must be included.

The applications ask the applicant to disclose any judgments, tax liens or pending litigation, as well as any prior bankruptcies. These must be disclosed for both the applicant and the owners of at least 20% of the applicant. If there are any of these issues, please make us aware of them as soon as possible so that we can be proactive in dealing with them.

Depending upon your specific business and your situation, the SBA may require additional documents. You should be prepared to provide three years of tax returns and other financial statements. You may also be asked to provide an SBA Form 1368, detailing three years of prior sales figures, along with figures for this year to date.

Forms attached.

Set up a quick call for more information and guidance.

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