By DAVID NAHAN/Sentinel staff
CAPE MAY COURT HOUSE – The U.S. Small Business Administration has federal disaster loans available to small businesses. If the businesses are approved, it could take only three weeks from the time of application until they get the needed funds.
The Cape May County Chamber of Commerce helped spread the word about the loans by putting members in touch with the U.S. Small Business Administration, which is offering low-interest federal disaster loans for working capital.
On Thursday morning, the county chamber offered a webinar – a web seminar – which allowed members and other interested business owners to log in via computer or smartphone and listen to the live presentation, complete with slide show, by SBA Deputy District Director John Blackstock.
Blackstock ran through a slide presentation with information about the disaster loans and then answered questions sent in through the seminar.
“Our chamber’s role is to advocate for and support the business community, and the best way we can do that right now is to get them the financial information and support they need,” said Vicki Clark, Cape May County Chamber President. “We’ll keep offering these webinars as new programs become available, so that attendees can have their questions answered while maintaining social distancing practices.”
Blackstock said although there may be better assistance programs coming down the pike quickly because of the $2 trillion federal disaster plan Congress approved, he said it was worthwhile for businesses to apply for these SBA disaster loans. Even if the loans are approved, he said, businesses don’t have to accept them. They would be able to turn them down in case more favorable programs arise in the interim. However, applying for the disaster loans would give the small businesses another option.
The loans, which must be applied for in the state in which the business has a physical presence, are for “working capital to small businesses suffering substantial economic injury as a result of the coronavirus (COVID-19).”
According to the SBA presentation, businesses eligible to apply are small businesses, small agricultural cooperatives, small aquaculture businesses and most private non-profit organizations including:
– “Businesses directly affected by the disaster
.
– Businesses that offer services directly related to the businesses in the declaration.
– Other businesses indirectly related to the industry that are likely to be harmed by losses in their community.”
Examples of eligible businesses, according to the SBA, include hotels, recreational facilities, charter boats, manufacturers, sports vendors, owners of rental property, restaurants, retailers, souvenir shops, travel agencies and wholesalers.
Blackstock made a point of noting that the Jersey shore area has a lot of businesses that fit the description.
Private non-profit organizations that can apply include nursing homes, food kitchens, museums, educational facilities, senior citizen centers, daycare centers, playhouses, community centers, shelters, rescue organizations and associations.
Applicants have to have a credit history acceptable to the SBA, which must determine that the business is able to repay it. Loan amounts are up to $2 million with interest rates of 3.75 percent for small businesses and 2.75 percent for nonprofits with up to 30-year terms. Loans over $25,000 require collateral.
The loan funds are not to replace lost sales, profits or expansion, but can be used for fixed debts, payroll, accounts payable and other bills that “could have been paid had the disaster not happened.”
Applicants apply directly to the SBA online at https://disasterloan.sba.gov/ela.
Blackstock noted that when the website went up initially, it was taken down because hackers were attacking the site to get businesses’ confidential information, but that had been rectified. He made a point last week of advising anyone who had started applying but didn’t finish to clear the cache on their computers before logging back in to finish the applications. He said he did not believe any information was taken, but that the SBA would inform businesses if that happened.
Blackstock said interested parties can do a paper application, but that filing electronically is easier, faster and more accurate. A paper application is available online as www.sba.gov/disaster.
There are a number of basic requirements in the application process, which include:
– Completed SBA loan application (SBA Form 5 or SBA Form 5C for sole proprietorships.)
– Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
– Complete copies of the most recent Federal Income Tax Return.
– Schedule of Liabilities (SBA Form 2202).
– Personal Financial Statement (SBA Form 413).
The SBA said it may also request:
– Complete copy, including all schedules, of the most recent Federal income tax return for principals, general partners or managing member, and affiliates (see filing requirements for more information).
– If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year.
– A current year-to-date profit-and-loss statement .
– Additional Filing Requirements (SBA Form 1368) providing monthly sales
figures. (This is especially important for Economic Injury Disaster Loans.)
Blackstock said there is a relatively quick turnaround from the time a business applies to when it can receive money – 21 days.
Businesses that are ineligible for this program include religious organizations and gambling concerns.
To learn more about the SBA and its programs, go online to www.sba.gov/disaster.