North Coast SBDCEureka and Crescent City California

Financial Help

Members of the COVID-19 Emergency Resilience Committee are pulling together a comprehensive menu of help being offered through local financial institutions. Stay tuned for listings of grants, low-interest loans, payment help, and much more.

Access to capital programs remain in place, including special disaster assistance at the state and federal levels.

Note: neither the North Coast SBDC nor any of its partners or funders endorses or influences this content. It's posted here for informational purposes only.

 

How can I apply for a SBA Economic Injury Disaster Loan?

Please start your application at the SBA Online Disaster Loan Assistance Portal AND apply for business consulting online or contact us at admin@northcoastsbdc.org (707) 445-9720 x210 to be paired with a SBDC business advisor who will help you through the application.

You can also download the Disaster Loan Paper Application Form and start pulling together your financial data offline beforehand, especially if the online system is difficult to access:

  • federal tax returns for the business
  • current business financial statements -- profit & loss, balance sheets
  • personal financial statement
  • schedule of liabilities (what you currently owe)
  • monthly sales figures
  • financial forecasts for sales, COGS etc during period affected by the disaster

Highlights:

  • The loan program is for businesses who can demonstrate their "economic injury is substantial and is a direct result of the declared disaster"
  • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
  • Loans are up to $2 million per business with ong-term repayments in order to keep payments affordable, up to a maximum of 30 years.The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
  • In reviewing your application the SBA will determine if you’re eligible as a disaster-affected business, and they will also check whether you have available credit elsewhere, which might affect the special rate.
  • Since decisions are made on a case by case basis, once the application is in it could be funded in a few days or it might take much longer. 
  • We have been told that you should still be able to apply for an economic injury disaster loan even if you already have a separate SBA loan.

More on the "Availability of Credit Elsewhere" Limitation:

  • If you tried but weren't able to secure credit elsewhere you do not need a "decline letter" from the lender. SBA will calculate the availability of "credit elsewhere" based upon a cash flow analysis and asset based ratio(s).
  • If the SBA determines you are/were able to secure credit elsewhere you can still request help through the SBA COVID19 Disaster Loan Program, thought it may affect the amount offered.
  • If you hope to secure gap funding from a local lender or grantmaker to tide you over until the SBA approval and first payment comes through, keep in mind this guidance from the SBA in San Francisco and discuss with your SBDC business advisor: "[Getting gap funding] does not disqualify them but it could reduce the overall loan amount if it's a duplication of benefits. Here's my recommendation... have borrowers disclose with specificity other local loans or grants they have received and what the proceeds were used for.  And perhaps they can use these other funding sources for financial needs which may not qualify under EIDL use of proceeds. For example: if the business has ordinary operating expenses and a long term debt obligation, use the local grant to help pay long term debt obligation and the EIDL loan to pay ordinary expenses like payroll, accounts receivable.  in theory, that wouldn't be a duplication of benefits."

 

Full Formal Announcement from SBA on 3/16/2020: SBA COVID19 Disaster Loan Program Open for Applications

For additional information, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov or visit www.sba.gov/disaster.

U.S. Small Business Administration is now accepting applications for low-interest federal disaster loans for working capital (Economic Injury Disaster Loans) for small businesses and private, non-profit organizations in designated counties of California and other states to help alleviate economic injury caused by the Coronavirus (COVID-19).

To access SBA assistance, go to the Disaster Loan Assistance portal.  You can click on “Eligible Disaster Areas” to see what counties have been designated as coronavirus disaster affected.  As of March 16, 2020, the following 35 California counties were designated: 

Alameda, Alpine, Amador, Calaveras, Contra Costa, El Dorado, Imperial, Kern, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Napa, Orange, Placer, Riverside, Sacramento, San Bernardino, San Diego, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tuolumne, Ventura, Yolo

Economic Injury Disaster Loans are working capital (rather than loans for physical damage) to help small businesses 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.

Federal law limits these to $2,000,000 maximum for alleviating economic injury caused by the disaster, and 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.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.  The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible.  The interest rate for non-profits is 2.75%.

SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years.  Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

To apply for an Economic Injury Disaster Loans, click on “Apply Online” and create an account and password.  Then submit your application.  An explanation of SBA disaster application loan process is here.  The application requires submitting the following forms (copes of which are available here):

Business Loan Application (SBA Form 5) completed and signed by business applicant.
IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available. 
Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).

Additional information may also be necessary to process your application:

Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
If the most recent Federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.
 A current year-to-date profit and loss statement.
Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.

AEDC Special help text here

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It all starts here. Complete the application and submit your request. A member of the SBDC will follow up with you and help you achieve your small business goals -- at no cost to you.
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Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA or HSU Sponsored Programs Foundation.