SBA Disaster Loan Assistance

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SBA Disaster Loan Assistance

Due to the severity of magnitude of the ongoing Corona Virus Disease 2019 (COVID-19) pandemic, the US President declared a state of disaster for all states, tribes, territories, and the District of Columbia pursuant to section 501 (b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the “Stafford Act”).


Note: This article is updated on 4/1/2020 to reflect the current development with Small Business Administration to date.


The declaration of disaster enables some business to apply for a disaster loan to Small Business Administration (SBA), provided that the business is in an SBA declared disaster area. SBA provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets.


Furthermore, due to the COVID-19, small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan under the SBA’s Economic Injury Disaster Loan (EIDL) Program and SBA Express Bridge Loans (EBL). These EIDL and EBL are different from normal SBA loan programs in that they are direct loans from the SBA rather than SBA-guaranteed loans through lenders and they have up to a 30-year and 7-year terms, respectively.


SBA'S EIDL PROGRAM

The SBA’s EIDL Program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.


Below is the 3-step process to apply for disaster assistance. You may also click HERE for the detailed guidance from SBA.


Who are qualified for SBA’s EIDL Program?

SBA’s EIDL Program is available for all small businesses, small agricultural cooperatives, and most private non-profit organizations in all U.S. states and territories. Churches, however, are considered religious organizations and are not funded by the SBA. They could only qualify if the church is operating a separate business.


The cannabis industry is also excluded from the scope of SBA’s EIDL Program.


Definition of a Small Business

The SBA usually benchmarks the average annual sales and/or average annual number of employees by industry in determining the size and scale of a small business.


Here’s a summary of historical criteria used per industry:

  • Agriculture – A maximum of $750,000 in average receipts is allowed.
  • Utilities – The maximum number of employees allowed ranges from 250 to 1,000 depending on the type of utility.
  • Manufacturing – The maximum number of employees allowed ranges from 500 to 1,500.
  • Information – The maximum number of employees allowed ranges from 500 to 1,500, and the maximum average of annual receipts permitted is $7.5 million to $38.5 million.
  • Finance and Insurance – The maximum number of employees allowed is 1,500, and the maximum average of annual receipts permitted is $32.5 million to $38.5 million.
  • Professional, Scientific, and Technical Services – The maximum number of employees allowed ranges from 1,000 to 1,500, or the maximum average of annual receipts permitted is $7.5 million to $20.5 million. 
  • Health Care and Social Assistance – The maximum average of annual receipts permitted is $7.5 million to $38.5 million.


You may also visit SBA’s size standard website for more information


How Can Scrubbed Help?


If you have questions or concerns, contact Scrubbed at [email protected] or connect directly with your trusted contacts from your outsourced accounting team.

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