Preparation of an SBA loan application


Any small business considering applying for a forgivable loan or grant from the Small Business Administration (SBA) during the COVID-19 crisis should gather its financial documentation now. This was the important direction of a recent webinar focused on the SBA loan process led by Ami Kassar, CEO of Multifunding LLC and author of The dilemma of growth.

Late last week, President Trump enacted the CARES Act, which provides businesses with fewer than 500 employees with Economic Disaster Loan Grants (EIDLs) and “forgivable loans” under the provision. of the paycheck protection program of the law. It is important to note that you must apply for an EIDL to receive a grant not exceeding $ 10,000. (See a summary of the small business provisions of the CARES Act.)

Booksellers should collect materials now, because the more businesses that apply for EIDL grants and forgivable loans, the greater the pressure on the SBA’s limited resources. It’s best to have all the necessary documentation on hand to avoid spending more time than necessary online or on the phone with lenders during the application process.

Kassar explained that in order to get an SBA loan (EIDL or otherwise), small business owners need to gather the following documents:

  1. Three years of personal and business income tax returns. Personal income tax returns are intended for any natural person who owns 20% or more of the business.

  2. Your 2019 income tax returns. Try to file your 2019 income tax returns as early as possible. If this is not possible, the lender will need your 2019 year-end financial statements.

  3. A personal financial statement for any owner who owns more than 20 percent of the business.

  4. A debt schedule for your business.

  5. Your monthly operating expenses from March to September of last year. You can find this information in your financial software. If you can’t find it, ask your accountant or accountant for help. This data will be an important part of your loan application.

Kassar also noted that if time is of the essence, applying for a regular 7 (a) SBA loan would be faster, as the SBA relies on local lenders to issue these loans. EIDLs are issued by the federal government. However, it is important to discuss with your local lender or an SBA representative which loan is best suited for your business.

Kassar is currently hosting daily webinars on the CARES Act. Register for a webinar here.

For more information, see the SBA website.


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