ECONOMIC INJURY DISASTER LOAN
Do you need assistance?
Are Virginia Small Companies Eligible?
What is it?
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).
- EIDL loans are 30 year term.
- The current rate of interest is 3.75%
- Interest accrues at on the date funds are issued.
- Repayment is deferred for 1-year from the date funds are issued. (You will not owe a first payment for 1-year).
- Loans are based on 6-months of operating expenses.
- Low credit scores must have a justification such as medical circumstance.
- Loans are based on ability of business to repay through cash flow.
- Maximum Working Capital Loan Amount is $2,000,000
- EIDL applicants are eligible for an immediate grant within three days of submitting the application of up to $10,000 for eligible entities.
I have an existing SBA Disaster Loan from a prior crisis.
Loan payments will be automatically deferred through December 31, 2020.
Summary Facts to know:
Tips that will make the process easier:
- Project loss for 3 – 9 months, and state why you chose that time frame.
- If you see a message pop up in a YELLOW box, SAVE your application immediately.
- Complete personal financial statement ahead of time. Scan and upload completed form.
- Be sure to check the box for ECONOMIC INJURY, not property damage.
- Accept loan offered for FULL amount. You can also make adjustments to the loan amount later.
- Apply as soon as your information is gathered. The process takes time, and it will be a while before you receive money.
- Apply even if you are not ready for the money. Once the application is approved, you have 6 months to determine if you need the funds.
- SBA goal is to get initial approval on loans in 18 to 21 days.
- If loan app isn’t complete, businesses will be asked for the additional information.
- SBA goal is to distribute funds within 1 week after getting final approval.
Documents that you will need:
- Business revenue numbers by month for the past two years, reported on SBA Form 1368.
- Business tax return for the last year filed. 2019 if you’ve completed it; 2018 otherwise. The tax return must include all schedules.
- Application–SBA Form 5 or SBA Form 5C (for sole proprietors)
- Personal financial statement—SBA Form 413-D. Please note that if you have partners, each partner who owns at least 20% of the business must complete this form.
- Schedule of business liabilities—Form 2202.
- Permission to request a copy of tax transcript from the IRS—Form 4506T. This must be completed by each owner with 20% of more interest in the business, as well as general partners and managing members.
- End-of-year profit and loss statement for 2019 and year-to-date profit and loss statement for 2020.
- End-of-year balance sheet for 2019.
- Copy of the most recent Federal tax return for each owner (20% or more), general partner, and managing member.
Links to forms:
SBA Form 5C (sole proprietors only): https://disasterloan.sba.gov/ela/Documents/Disaster%20Home%20Loan%20Application%20(SBA%20Form%205c).aspx
IRS Form 4506-T: https://www.irs.gov/pub/irs-pdf/f4506t.pdf
FEDERAL TAX FILING MOVED TO JULY15, 2020 (NOT APRIL 15, 2020)
Tax Day now July 15, Treasury, IRS extend filing deadline and federal tax payments regardless of amount:
Federal Tax Payments including Self Employment Taxes are now due on July 15:
VIRGINIA TAX FILING DEADLINE REMAINS ON MAY 1, PAYMENTS ARE EXTENDED TO JUNE 1
IRS EMPLOYEE RETENTION CREDIT
The Employee Retention Credit is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.
Filing Form: https://www.irs.gov/pub/irs-pdf/f7200.pdf
IMPORTANT COVID-19 LINKS FROM STATE AND NATIONAL RESOURCES
State of Virginia (very comprehensive):
Centers for Disease Control (business focus):
Department of Labor:
U.S. Chamber of Commerce:
U.S. Small Business Administration:
U.S. Internal Revenue Service:
Virginia Employment Commission:
Main Street America:
U.S. Department of Agriculture:
Government Loan Program Search Portal: