Economic Injury Disaster Loans
Nick Roell
Mar 24, 2020

Summary of the Economic Injury Disaster Loans March 24, 2020
This document is based on information available as of the date of the document. As additional guidance is issued, this document will be updated. Please check back for the most up to date information.
Note: we are familiar with the process and can assist you with the application. Please call your Kirsch CPA relationship manager for more information or for assistance with the application process.
In response to COVID-19 pandemic sweeping the country, the U.S. Small Business Administration is allowing small businesses and nonprofits to apply for low-interest, long-term loans of up to $2 million through the Economic Injury Disaster Loan Program.
The program applies to all small businesses and most private non-profits. Ineligible business includes public non-profits, religious-based organizations, casinos and other gambling enterprises, and agricultural enterprises.
The criteria for loan approval are:
- Applicants must have a credit history that the SBA deems acceptable.
- SBA must determine there will be an ability to repay the loan.
- The business must be in a declared county and suffered working capital losses due to COVID-19.
The details:
- Eligible entities may qualify for loans up to $2M with terms up to 30 years. The interest rates are 3.75% for small businesses and 2.75% for non-profits.
- Loan funds can be used to pay fixed debts, payroll, accounts payables and other operating expenses. These loans are not meant to replace sales, be used for expansion, or to refinance existing debt.
- For loans under $25,000, they are unsecured. Over $25,000 will be secured.
-
- – They will take a lien on all available collateral (business and personal) regardless of lien position or if there is equity in the assets.
- – They won’t decline a loan for lack of collateral. The loan approval is based on cash flow and ability to meet payment obligations.
- – Personal Guarantee will apply for greater than 20% owners.
- There is a 11-month deferment on payments from the date you sign the note. If you execute the note on April 1, 2020, your first payment will be due April 1, 2021.
- General guidelines suggest the maximum loan will be 50% of gross profit from the last completed tax return.
What’s required:
- Apply at https://www.sba.gov/funding-programs/disaster-assistance
- Complete SBA loan application – Form 5 (business entities) or 5c (sole proprietors).
- Completed IRS Form 4506T for the applicant business and any greater than 20% owners.
- Completed copies of the most recent Federal Income Tax Return. If this is not yet available, a balance sheet and profit and loss for the most recent year need to be submitted.
- An interim 2020 Profit and Loss and Balance Sheet.
- Completed SBA Form 2202 – Schedule of Liabilities.
- Completed SBA Form 413 – Personal Financial Statement for greater than 20% owners.
- Completed SBA Form 1368 – Monthly sales figures.

About The Author
Nick is passionate about making an impact on small and medium-sized businesses. Focusing on increasing the performance of…
Tags
Sign Up for Email Updates
Related Articles



Tax Treatment of Debt Forgiveness: Watch Out for Tax Bills Delivered COD
- 01-18-23
- Kirsch CPA Group












Manufacturers: Be Aware of These 3 Business Tax Provisions Currently in Limbo
- 01-18-23
- Kirsch CPA Group



The Tax Deductible Mileage Rate for Business Driving Increases for 2023
- 01-04-23
- Kirsch CPA Group









Succession Planning Considerations for Construction Business Owners
- 12-14-22
- Kirsch CPA Group






Prevent Fraud at Your Construction Company With a Holistic Approach
- 11-30-22
- Kirsch CPA Group









Manufacturers Must Act Now to Maximize Depreciation-Related Tax Breaks for 2022
- 11-09-22
- Kirsch CPA Group



It’s Time for Businesses to Rethink Their Working Capital Practices
- 11-09-22
- Kirsch CPA Group









Social Security Wage Base and Earnings Test Amounts Increase in 2023
- 10-27-22
- Kirsch CPA Group



New Law Enhances Payroll Tax Break for Small Manufacturers’ Research Expenses
- 10-13-22
- Kirsch CPA Group







































How Buy-Sell Agreements Factor into Business Owners’ Estate Plans
- 09-14-22
- Kirsch CPA Group









SALT Cap Workaround Law Could Save Ohio Business Owners Over $100 Million
- 08-31-22
- Kirsch CPA Group
























How Manufacturing Companies Can Benefit from the Section 179 Expensing Deduction
- 08-04-22
- Kirsch CPA Group



























Could the Work Opportunity Tax Credit Help Your Construction Company?
- 06-23-22
- Kirsch CPA Group






Good News: IRS Boosts Standard Mileage Rates for Second Half of 2022
- 06-23-22
- Kirsch CPA Group
























Education Benefits Can Help You Recruit and Retain Smart Employees
- 05-26-22
- Kirsch CPA Group









Ensure Your Construction Accounting System Has the Right Features
- 05-12-22
- Kirsch CPA Group





















John Kirsch Named to Greater Butler and Warren Counties Business Hall of Fame
- 03-25-22
- Diane Glover






Manufacturers Need to Act Soon to Take Advantage of 100% First-year Bonus Depreciation
- 03-17-22
- Kirsch CPA Group



























Commission Fraud: Salespeople Getting Paid More Than They’ve Earned
- 02-04-22
- Kirsch CPA Group
















































Consider a New Approach to Meeting Your Business Real Estate Need
- 09-17-21
- Kirsch CPA Group
























Beware: Teleworking Arrangements May Cause State Tax Withholding Issues
- 08-18-21
- Kirsch CPA Group
























5 Common Construction Accounting Risks — and How to Address Them
- 07-07-21
- Kirsch CPA Group















Supreme Court Finds No Standing to Challenge a Provision of the ACA
- 06-24-21
- Kirsch CPA Group






Labor Shortage: Unlock Solutions by Evaluating Your Employment Value Proposition
- 06-09-21
- Kirsch CPA Group









Material Participation Standard is the Key to Unlocking LLC Tax Losses
- 05-27-21
- Kirsch CPA Group









Know Your Legal Obligations Under the Americans with Disabilities Act
- 05-13-21
- Kirsch CPA Group



























PPP Loan Not Forgiven? There’s a Safe Harbor for Deducting Expenses
- 12-03-20
- Kirsch CPA Group












What You Need to Know About the Deferral of Payroll Tax Obligations
- 09-15-20
- Kirsch CPA Group


















PPP Loan Forgiveness – Significant Borrower Friendly Changes on the Horizon
- 06-04-20
- John Kirsch


















Tax Filing Deadline Remains April 15 – Payment Due Extended to July 15
- 03-19-20
- John Kirsch








































































Prepare to Receive a Social Security Administration No-Match Letter
- 10-15-19
- Kirsch CPA Group





















IRS Announces Changes for Personal Use of Employer-Provided Vehicles
- 06-10-19
- Diane Glover






























Watch Out for these Tax Issues When Planning for Your Business in 2018
- 06-26-18
- Diane Glover









What Image Does Your Organization Present to Large Contributors?
- 03-15-18
- Kirsch CPA Group



8 strategies to help you adapt to economic down turn without layoffs
- 02-24-18
- Diane Glover













































Remember To Take Required Minimum Distributions at Age 70 1/2 Or Face Penalties
- 02-17-17
- Sue Schloemer







































Time is Money: Don’t Spend Valuable Time Inputting Data into QuickBooks
- 06-18-22
- Diane Glover




