Updated 2:18 pm, 3/20/2020
Ohio has been qualified for the Economic Injury Disaster Loan program because of the coronavirus. Ohio small business owners, small agricultural coops, and private nonprofits can now apply for these loans up to $2.5 million, up to 30 years.
1. General Overview
Economic Injury Disaster Loans are exactly that – loans, not grants. They will require repayment (basic terms can be found here). These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. Loan rates are expected to be 3.75% for businesses and 2.75% for non-profits with long-term repayments in order to keep payments affordable. Terms will be determined on a case by case basis. Here are other things you need to know:
- These loans are only intended as working capital loans utilized to assist with impact caused by the coronavirus emergency efforts. The EIDL’s are not for other purposes such as expansion, new equipment, property purchases, etc. that do not have anything to do with the national emergency we are facing.
- Interest rates will likely be 3.75% for businesses and 2.75% for non-profits.
- Loan applications will be evaluated by SBA loan officers. Criteria include:
- Credit history acceptable to the SBA
- Repayment abilities
- Eligibility – businesses in a declared state/county, suffered working capital losses due to the declared disaster (not a general downturn in business due to the economy or other reasons.)
2. Process Overview
To get an overview of the three-step process, you can go here – Overview).
- Step 1 – Apply for a Loan
- Step 2 – Loan Processing Decision Made
- Step 3 – Loan Closed and Funds Disbursed
Note – we recommend filing electronically, but are providing links to the forms so that you can get your information ready to go. You can file with paper, but we expect that will take longer.
3. Required Documents
For Businesses – documents you need to complete an application:
- Business Loan Application (SBA Form 5) completed and signed by business applicant.
- Request for Transcript of Tax Return (IRS Form 4506-T) completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
- Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
- Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
- Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
For Businesses – additional documents you may need to submit
- Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
- 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 is acceptable.
- A current year-to-date profit and loss statement.
- Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.