The U.S. Small Business Administration (SBA) has begun offering emergency disaster loans for Kansas businesses n response to the COVID-19 pandemic. The SBA will work directly with state governors to target businesses and nonprofits most affected by Coronavirus. The low-interest loans can provide up to $2 million through the SBA’s Economic Injury Disaster program.
The Kansas Small Business Development Center at the Johnson County Community College, participated in a video conference to learn more about the SBA’s Economic Impact Disaster Loans for businesses affected by COVID-19.
Here are the top 5 things they learned:
• There is no blank on the application where a business would enter a loan request amount. The SBA will estimate a loan amount based upon the expenses shown on a business’ tax return (or latest P/L), credit and ability to repay.
• Choose only “Economic Injury” on the application – no property losses should be entered.
• If your small business doesn’t have its 2019 tax returns complete, you may enter a P/L for 2019.
• Loan repayment will be deferred for 11 months (in other words, payments begin a year after closing). Note that interest will accrue after loan closing.
• When an SBA Loan Officer offers a loan amount, you can ask for less or reject the loan entirely. If the business still hasn’t recovered and the initial loan has been exhausted, it may seek additional funding without completing another loan application.
If your business has experienced losses or been impacted by COVID-19, please apply as soon as possible.