Everything You Need To Know About SBA Loans
On Saturday, March 21st, Alabama’s application was granted by the SBA to extend disaster loans to small businesses affected by COVID-19. As a result, businesses in Alabama are now eligible to apply for these disaster loans that can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid due to the economic impacts of COVID-19. The SBA has approved a one-year deferment on the payments and the loans will bear interest at 3.75% (2.75% for non-profits) for a term of up to 30 years.
Here are the highlights:
– Loans are up to $2 million and will bear interest at 3.75% or 2.75% for non-profits
– If your business has business interruption insurance, the proceeds of that insurance would be subtracted from the eligible $2 million ceiling
– Loan terms can be up to 30 years. However, the law restricts businesses with credit elsewhere to a 7-year term
To file you will need:
– 3 years of the most recent federal income tax returns
– An interim profit and loss statement
– A current schedule of liabilities
– For each owner having a 20% or more interest or a general partner, a personal financial statement within 90 days of the loan application
– The borrower will need to offer collateral if available
– The borrower will need to show the sales level and net income of the business for a few months prior to the COVID-19 pandemic and what level looks like after the pandemic
– You can apply one of three ways: online, in-person at SBA disaster center or by U.S. Mail
Small business owners in all states may apply for an Economic Injury Disaster Loan Advance of up to $10,000. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.
Contact Fi Plan Partners for more information on how we can assist you in this process.
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
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