Targeted EIDL Program with the Coronavirus Relief Bill
|Coronavirus Relief Bill Programs||SBA Disaster Loans|
|Eligibility requirements||25 of fewer employees 30% reduction in revenue Located in a low-income area|
|Funding||The lesser of: Working capital for 180 days OR $50,000|
|Term lengths||30 years|
Similarly one may ask, do SBA disaster loans require collateral?
(1) Economic injury disaster loans. Generally, SBA will not require that you pledge collateral to secure an economic injury disaster loan of $25,000 or less. … Generally, SBA will not require that you pledge collateral to secure a physical disaster home or physical disaster business loan of $25,000 or less.
Also to know is, what can you use SBA disaster loans for?
An SBA disaster loan can be used to repair or replace real estate, personal property, machinery and equipment, and inventory and business assets.
What is the minimum credit score for an SBA loan?
While an EIDL business loan can be for as much as $2 million (usually) and must be repaid, the EIDL advance is for up to $10,000 and completely forgivable, making it a grant. … If the EIDL advance is forgiven, it becomes a grant and does not need to be repaid.
When it comes to SBA disaster loan credit score requirements, there’s no hard and fast minimum credit score you’ll need for approval. However, the SBA usually wants to see a credit score of 620 or higher. If you aren’t quite at the 620 mark, you might still qualify for a disaster loan.
So, you may be wondering: “How long does it take to get an SBA loan?” The short answer is that you could have the funds in your account anywhere from 30 days to a couple of months or longer. By nature, these are not emergency lifelines, unlike SBA’s Paycheck Protection Program (PPP).
Can I get an SBA loan with bad credit? As mentioned, it’s up to the lender to approve you for an SBA 7(a) loan. If you‘re applying for an SBA loan with bad credit, your chances of getting approved can still be relatively good if you‘ve been in business for several years.
Pros and cons of SBA loans
|Businesses typically not approved for traditional loans could qualify||Collateral could be required|
|Capped interest rates||Personal liability if the business defaults|
|Small and large loan amounts offered||Slow approval process|
To apply for loan forgiveness:
Your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent. The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements.
The SBA simply backs the loan (agrees to repay it if the borrower defaults), ultimately reducing the amount of risk the lender takes on. The loan can be used to buy real estate or land, treated like working capital, or spent on equipment costs. Small businesses can also use the SBA 7(a) loan to refinance existing debt.
If You‘re Denied for an SBA Loan, Reapply or Consider Alternatives. … You can reapply for an SBA loan after 90 days.
While the SBA refers to this program as an advance, it was written into law as a grant. This means that the amount you are given through this program does not need to be repaid, even if your application is ultimately rejected. There will be no interest charged on this amount.