SBA Coronavirus Disease (COVID-19) Relief Loans

There is likely to be a significant backlog so apply as soon as possible if needed – use this link

 There is some leg work, but the repayment terms are business-friendly.

 These loans are for working capital and not to expand or refinance existing debt. They may be used to pay fixed debts, payroll, rent, accounts payable and other bills that can’t be paid because of the disaster’s impact.

 Loans of up to $2 million

 The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.

 SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

They are administered directly through the SBA and not your local bank.

On a case by case basis, loans offered under this program may have a forgiveness clause as a feature and the forgiveness will likely be tied to the portion allocated to payroll. Forgiveness is likely to be reduced by the amount of payroll cut.

 I HIGHLY recommend that you fill out the forms completely. Taking your time to make sure that everything is filled out properly will do wonders to make sure that your loan is processed promptly. Rushing these forms will likely cause significantly more delays. It is worth it to fill everything out properly.  

Small business must show an ability to repay the loan based on the 2019 financial statements

Illinois, Arkansas, and the following counties in Missouri are currently eligible: Cape Girardeau, Clark, Jefferson, Lewis, Lincoln, Marion, Mississippi, Perry, Pike, Ralls, Saint Charles, Saint Louis, Saint Louis City, Sainte Genevieve, Scott

The loan program is for operating companies only and not real estate investment or other passive investments

Anyone that owns 20% or greater will have to guaranty the loan. If nobody owns greater than 20% then someone will have to guaranty the loan.

SBA Credit Elsewhere Test Applies. This typically means that if a guarantor or the business has greater cash and marketable securities on their personal financial statement than the loan request then they may be considered ineligible.

SBA’s traditional size standards do apply. This is a Tangible Net Worth of less than $15 Million and an average profit over the previous 2 years of less than 5 Million. This does include the applicant company and any affiliates. The SBA defines an affiliate as any company that anyone that owns 20% or greater in the applicant company also owns 20% or greater in another company.

Jeremy Klaven, CPA#1 First Missouri Center, Suite 214St. Louis, MO 63141cell: (314) 583-6515office: (314)720-8686fax: (314)