COVID-19 Loan Relief from the Small Business Administration
Many small businesses, including a number of our clients, foresee or are beginning to feel the very real economic impact of the COVID-19 pandemic. With forced or voluntary closures and widespread social distancing, employers need to replace lost revenue to continue to pay their expenses.
The Small Business Association (“SBA”) has long been a resource for loans, but it also expands its availability in times of disasters, and is now again offering assistance that goes beyond its normal support. For small businesses suffering the effects of COVID-19, the SBA is providing Economic Injury Disaster Loans.
These loans provide up to $2 million in capital, for use with debts, payroll, accounts payable, and other expenditures that otherwise would be difficult to pay. The terms vary on a case-by-case basis, but can extend to as long as 30 years at favorable rates as low as 3.75% or 2.75% for businesses and non-profit entities, respectively.
The SBA encourages applicants to apply for these loans online. Some documentation that commonly accompanies loan applications may be requested, including financial statements, tax returns, information regarding entity structure and ownership percentage, and completion of Form 4506-T, which authorizes the IRS to share records with the SBA.
Congress is working on a number of additional wide-reaching relief provisions, and we will learn and share those with you as they materialize. This SBA relief, though, is available now, and we encourage those who need it (or think they might soon) to consider taking advantage of it.
For more information, please contact your BNN tax advisor at 800.244.7444.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.