Through Acara’s continued commitment to providing our industry with resources available to aesthetic practices and medical spas, we’d like to highlight some supplemental information about the SBA Economic Injury Disaster Loan Program.
To check your state’s current eligibility, use the following SBA link: https://disasterloan.sba.gov/ela/Declarations/Index
We anticipate that coverage is or soon will be available nationwide.
The Below Information has been outlined by Acara’s attorney: Brenner, Saltzman & Wallman LLP. Content supplied by Julio Casiano, Deputy District Director of the SBA.
How Do I Submit?
Businesses submit applications for disaster loans directly to the SBA at:
Who Provides Funding?
Funding is provided directly by the federal government with no involvement by any banks.
Are There Any Costs to Apply?
There are no costs or fees to apply for a disaster loan and no closing costs.
What Criteria Is There to Receive the Loan?
Applicants have to show ability to repay based on financial information and tax returns (and assuming no impact from Coronavirus). If a business can’t justify the loan amount requested, the SBA may approve a lesser amount. Maximum loan amount $2 million, maximum term 30 years.
Loan proceed can be used only for working capital purposes, and not intended to fund equipment purchases or to replace lost sales/lost profits.
Are the Loans Secured or Unsecured?
Loans under $25,000 will be made on an unsecured basis; loans over $25,000 have to be secured by whatever collateral is available. Applicants should not worry about inadequate collateral – submit application and let the SBA make the decision.
Value of available collateral does not have to cover full amount of the loan; SBA is more interested in ability to repay.
Am I Obligated to Take an Approved Loan?
There is no obligation for an applicant to take an approved loan.
What If I Already Have a Disaster Loan?
Businesses that have an existing SBA disaster loan (e.g. from Hurricane Disasters) can still apply for a new disaster loan to address economic injury related to the Coronavirus.
What If I Just Opened?
New businesses can apply for a loan even if they don’t have historical financial information or haven’t file tax returns – the SBA will accept projections to determine ability to repay.
How Long Will This All Take?
The time frame for processing applications is generally 18 – 21 days.
Where Do I Manage All This?
The SBA website enables applicant to keep track of status of loan application.
Every business has been impacted by this novel virus, ours included. We recommend every business to apply and let the SBA make their determinations. There is no harm in doing so. Don’t just assume that your business won’t qualify for a disaster loan.
SBA Disaster Loan customer service:
Telephone # 800-659-2955