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SBA ECONOMIC INJURY DISASTER LOANS (EIDL)

The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Here's key information you need to know:

Eligibility

In order to be eligible, you must be a small business (500 employees or less). Eligible businesses include:

  • North Carolina small businesses affected by the disaster - common eligible businesses include retailers, restaurants, recreational facilities, tourism-based businesses, manufacturers, owners of rental property, hotels, and wholesalers
  • Private non-profits
  • Small agriculture cooperatives are eligible, but agricultural enterprises are not
  • Small aquaculture businesses

Criteria for loan approval

  • Credit history – Applicants must have a credit history acceptable to SBA
  • Repayment – SBA must determine that the applicant business has the ability to repay the SBA loan
  • Eligibility – The applicant business must be located in a declared disaster area and have suffered working capital losses due to the declared disaster

Use of loan funds

These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or for expansion.

Application amount

You will not be asked how much you would like to borrow. The SBA uses the information you provide to determine the loan amount. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.

Interest rate and term

The interest rates for this disaster at 3.75 percent for small businesses and 2.75 percent for non-profit organizations.

Collateral requirements

  • Economic Injury Disaster Loans over $25,000 require collateral
  • SBA takes real estate as collateral when it is available
  • SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available

Basic filing requirements

  • Completed SBA loan application (SBA Form 5 or 5C)
  • Tax information authorization (IRE Form 4506T) for the applicant and other business principals
  • Complete copies of the most recent Federal Income Tax Return.
  • Schedule of Liabilities (SBA Form 2202)
  • Personal Financial Statement (SBA Form 413)
  • Current year—to-date profit and loss statement
  • Monthly sales figures (SBA Form 1368)

How to apply

The SBA has modified the application process. Instead of completing the application in the online portal, you download the required forms, fill them out, and then upload them to the portal. View detailed instructions under “Apply Online” on the Disaster Loan Assistance page.

Likely Timelines

SBA is projecting that once a completed application is received, it will take 2-3 weeks to get a “yes or no” decision. If the loan is approved, it will take approximating 7 days to receive the funds. Taken together, it will likely take about a month between submitting a completed application and receiving the loan proceeds.

Application assistance

The SBTDC has developed an on-demand WEBINAR that walks through the revised SBA Economic Injury Disaster Loan application process step-by-step.




SBA Express Bridge Loans

The Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster Loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Bridge Loan.

Businesses may apply for up to $25,000. The loan will be repaid in full or in part by proceeds from the SBA EIDL loan. To find an Express Bridge Loan Lender, see SBA’s Lender Match Tool or contact the NC SBA District Office.




NC COVID-19 Rapid Recovery Loan Program

The North Carolina COVID-19 Rapid Recovery Lending program supports North Carolina small businesses and family farms as they recover from the economic impact of COVID-19. This rapid recovery loan helps small businesses bridge the gap between when crisis strikes and when federal loans, insurance payouts, and other relief funds are approved, or businesses have time to recover.

NC COVID-19 Rapid Recovery loans are not designed to be a singular source of assistance for small businesses. Repayment is expected either from more permanent funding sources or from the future cash flow of the business.

Loan Details

Loans are available for up to $50,000, based on the business’s current revenue. Loan agreements are structured as follows:

  • Loan sizes capped at approximately two months of current revenue.
  • Six months of no interest and no payments, followed by 48 months of principal and interest payments at 5.5% interest.
  • Interest will begin to accrue on any unpaid balance at the beginning of the seventh month.
  • There are no prepayment penalties.
  • Defaulted loans are subject to collections.

Who is eligible?

  • Applicants must be a North Carolina small business affected by COVID-19 (all 100 NC counties are eligible).
  • Applicants must have at least one (1) employee, who could be the self-employed owner.
  • Start-up businesses that began operations before March 23, 2020 are eligible.

Requirements

  • Any individual with greater than 20% ownership in the applying business must personally guarantee the loan.
  • Proceeds from the loan may only be used for maintaining or restarting a business.
  • The use of loan funds to pay off debts already incurred for qualifying business maintenance or restart purposes may be authorized on a case-by-case basis.
  • Borrowers are required to assign the proceeds of future assistance programs, including SBA loans, to the repayment of their Rapid Recovery Loan.

Logistics & Timeline

  • Businesses interested in applying should be prepared to complete an online application and provide tax returns, profit and loss statements, and bank statements.
  • The partners in this program are committed to moving quick to assist businesses and they will be in touch with applicants as soon as possible.
  • Loans subject to availability of funds.



COVID-19 Capital Relief Database

CASE at Duke launched #COVID19CapitalRelief, a searchable database for global, national and regional capital sources for profit and nonprofit entrepreneurs at risk due to #COVID19. It already contains over 90 capital offerings worth over $14.5 billion.

To learn more: https://www.linkedin.com/pulse/helping-entrepreneurs-covid19-world-part-2-over-145-billion-clark
To find capital: https://bit.ly/COVID19CapitalRelief




Federal Coronavirus Tax Relief

The U.S. Treasury Department and Internal Revenue Service have announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020. Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.




N.C. Department of Revenue Special Penalty Relief

N.C. Department of Revenue recently announced that they will extend the April 15 tax filing deadline to July 15 for individual, corporate, and franchise taxes to mirror the announced deadline change from the Internal Revenue Service. In addition to the filing extension, the NCDOR will not charge penalties for those filing and paying their taxes after April 15, as long as they file and pay their tax before the updated July 15 deadline.




EXIM Export Credit Insurance

Export-Import Bank of the United States (EXIM) Export Credit Insurance relief measures are as follows:

1. Multi-Buyer and Single-Buyer Short-Term Insurance Program

  • Streamlined processing of multi-buyer policy renewals that are eligible for renewal within 60 days from the date of this notification;
  • Extension of expiry dates of up to 30 days for exporter single-buyer policy (ESS) renewals that expire within 60 days from the date of this notification;
  • Streamlined processing of all Special Buyer Credit Limit (SBCL) renewals that expire on or before April 1, 2020, including the extension of the final shipment date up to 30 days;
  • Extension of up to 30 days for shipment reporting and premium payment deadlines for all shipments made during a 30-day period from the date of this notification;
  • Extension of overdue reporting requirements for up to 30 days for all overdues that would normally have required reporting during the next 30 days from the date of this notification;
  • Extension of up to 30 days beyond the claim filing period if the claim filing deadline specified in the policy occurs within 30 days from the date of this notification;
  • Flexibility in claims analysis and the documentation necessary to file a claim; and
  • If you are a financial institution with a Letter of Credit Policy or Financial Institution Buyer Credit Policy, please contact us if assistance is needed to address concerns regarding your insurance-related obligations.

2. Medium-Term Single-Buyer Insurance Policies Issued to Exporters

  • Extension of up to 30 days beyond the claim filing period if the claim filing deadline specified in the policy occurs within 30 days from the date of this notification;
  • Extension of up to 30 days for policies that expire within 60 days from the date of this notification;
  • Extensions of up to 30 days of shipment reporting and premium payment deadlines for all shipments made during a 30-day period from the date of this notification;
  • Flexibility in claims analysis and the documentation necessary to file a claim; and
  • If you are a financial institution or a policyholder/guaranteed lender financing impacted exporters, please contact us if assistance is needed to address concerns regarding EXIM coverage obligations.

Should you have any questions regarding this fact sheet, we encourage you to contact Sharyn Koenig | sharyn.koenig@exim.gov | (305) 526-7436 x17




City and County Small Business Emergency Funds

Orange County | Carrboro