Updated: March 25, 2020 at 9:00 AM
On March 19, 2020, Pennsylvania Governor Tom Wolf and Maryland Governor Larry Hogan announced that small businesses and eligible nonprofit organizations impacted by the coronavirus in Pennsylvania and Maryland will be able to apply for low-interest loans through the U.S. Small Business Administration (SBA).
SBA’s Economic Injury Disaster Loans can provide up to $2 million to help small businesses overcome their temporary loss of revenue due to coronavirus-related event postponements and business closures. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot otherwise be paid due to the impact of the coronavirus. These loans are only available for small businesses without credit available elsewhere. The interest rate is 3.75% for small businesses and 2.75% for nonprofit organizations.
SBA offers long-term repayment options in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis.
The 3-Step Loan Process
The 3-step process to apply for an SBA disaster loan is as follows:
Step 1: Apply for an Economic Injury Disaster Loan online, in-person at a disaster center or by mail. Applicants may apply securely online at https://disasterloan.sba.gov/ela. The deadline to return disaster loan applications is December 21, 2020.
Step 2: SBA will review your credit, conduct an inspection to verify your losses, determine your eligibility for funding and contact you to discuss the loan determination, with the goal of arriving at a decision on your application within 2-3 weeks.
Step 3: SBA will provide the required documentation to close your loan and disburse payment to you, if applicable. A case manager will be assigned to help you navigate the process and meet all the loan conditions.
The SBA requires the following documentation in order to process your request for a disaster loan for your business:
- Business Loan Application (SBA Form 5), completed and signed.
- 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 each affiliate when any owner owns more than 50% of an affiliate business (including business parent, subsidiaries and/or businesses with common ownership or management).
- Most recent Federal income tax returns for the business, including all schedules (or an explanation if not available).
- Personal Financial Statement (SBA Form 413), completed and signed by: the applicant (if a sole proprietorship); each principal owning 20% or more of the applicant business; and each general partner or managing member.
- Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used to meet this requirement).
Additionally, the following documentation may be necessary to process your application on a case by case basis:
- Most recent Federal income tax returns (including all schedules) for management, defined as: each principal owning 20% or more of the applicant business; each general partner or managing member; and each affiliate when any owner owns more than 50% of an affiliate business (including business parent, subsidiaries and/or businesses with common ownership or management). If the most recent Federal income tax return has not yet been filed, a year-end profit and loss statement and balance sheet for that tax year is an acceptable alternative.
- A current year-to-date profit and loss statement.
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.
Contact the SBA for More Information
Small businesses and nonprofits may obtain more information by:
Website: visit https://disasterloan.sba.gov/ela
Phone: call the SBA’s Customer Service Center at 1-800-659-2955 (1-800-877-8339 for the hearing impaired)