The SBA has issued a new disaster declaration, allowing low interest liquidity loans to qualified small businesses suffering economic injury as a result of coronavirus.

To our small business clients - The U.S. Small Business Administration has amended its original disaster declaration to allow low interest liquidity loans to small businesses suffering substantial economic injury as a result of coronavirus. Small businesses in all Washington counties may qualify under these terms. This update intends to provide liquidity aid to small businesses during these challenging times by making sure credit is available when it may not otherwise be obtainable. Funding may be available for businesses that are unable to access working capital on reasonable terms through traditional lending sources. The loans are intended to provide vital economic support to small businesses overcoming temporary losses of revenue. Proceeds can be used to pay fixed debts, payroll, accounts payable, and "other bills that cannot be paid because of the disaster's impact."

These loans are available in amounts up to $2 million with proceeds being limited to the economic injury determined by the SBA on a case-by-case basis. The loan term length can be up to a maximum of 30 years with a fixed interest rate of 3.75% for for-profit enterprises, and 2.75% for nonprofits. The loan application at minimum requires certain documentation including a completed IRS Form 4506-T (Request for Transcript of Tax Return), complete copies of most recently available business Federal Income Tax Return, personal financial statement (SBA Form 413) for owners of 20% or more of the business, and a schedule of all liabilities of the company. The SBA has provided guidance that loan decisions could exceed 2-3 weeks so it is important to get an application started soon if a loan is desired.

This is not the only source of disaster relief currently available, and there are other SBA or non-SBA programs that may be better suited to your business's needs.

We recommend that you consult with both your CPA and your existing lenders when considering this or other liquidity solutions. If you want to discuss your options, please connect with us at 253.858.5434. We're here to help!