As of Friday, March 13, 2020, President Trump declared a national emergency to combat the Coronavirus (COVID-19). Businesses across the nation may be suffering dramatic losses due to the unprecedented response to the virus. Health officials are recommending social distancing guidelines, and travel has severely decreased, among other restrictions, which has caused business to slow down in various industries. Now that a state of emergency has been announced, companies can request some loan assistance to ease financial losses incurred during this tumultuous time.

What businesses qualify for the loan?

All small businesses and private non-profits with a physical location in a US state or US territory, excluding some religious institutions and cannabis businesses, are eligible and can now apply.  Businesses must be able to prove an economic injury.  An injury is defined as a loss in revenue resulting in the inability to cover business expenses.  Eligibility is being backdated to January 31, 2020, to allow businesses to show their injury beginning in February or March.  Businesses can also qualify by showing anticipated (future) economic injury.

How does the SBA define a small business?

There are several measures the SBA uses to define a small business, and it varies by industry. As a general guide, less than 500 employees and $35 million in revenue would typically qualify.

How much can I borrow?

Due to the disaster’s impact, small businesses can borrow up to $2 million to pay fixed debts, payroll, accounts payable, and other bills.

What is the interest rate?

The interest rate is 3.75% (per annum) for small businesses, 2.75% (per annum) for non-profits.

What is the term of the loan?

Up to a maximum of 30 years; terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

When do I begin repaying the loan?

Loan payments are deferred for a year, so there are no payments due in the first year.  Interest on the loan does accrue during that time.

What collateral do I need to provide for this loan?

The SBA will take a general UCC filing against the assets of the business.  No real estate collateral is required for the loan.

Will the SBA do a credit check?

Yes, but the company’s credit does not have to be spotless.

Do I need to have filed my 2019 Taxes returns to apply?

No, 2019 Taxes do not have to be filed prior to applying for the loan.  However, businesses will be asked to submit IRS form 4506T, which provides the SBA with access to historical tax returns.

How long will the loan application take?

2-3 weeks plus an additional 5 days for funding.

Can I apply now?

Yes, the application process is live, and loans are available now.  There is no obligation to accept the loan if you qualify. The SBA typically allows 60 days to accept the loan offer, but you can always extend this if needed. Therefore, it is better to apply ASAP.

How do I apply?

  1. Register and apply online at

The SBA highly recommends applying online, rather than using the paper form. Online processing will be faster and will also allow the business to receive automated status updates.

  1. Your information will be verified – The verification includes a review of credit, estimate of the total loss, determination of eligibility, and guidance through the remaining process with a loan officer.
  2. You will receive a decision on whether your loan has been approved or not. This process will take 2 to 3 weeks.
  3. Once the application is approved it takes up to 5 days for funds to be disbursed to you.

What documentation is Required for the SBA Loan?

  • Business Loan Application (SBA Form 5) completed and signed by the business applicant.
  • 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’s business, or 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).

Additional Information That May be Necessary to Process the Application

  • 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.

Do You Need Assistance with the SBA Loan Application Process?

While the application process is only a few steps, each step is time-consuming and could be overwhelming in an already difficult time. Don’t worry. We can help. Our accounting team is well-versed in the process and can guide your business through each step of the process. Contact us today to get started.

Co-author: Paren Knadjian

Additional Resources

About the Author

Jason C. Melillo, CPA, CEOJason Melillo
Tax, Tax Specialty Services
Jason Melillo, CPA, is the CEO of KROST and a Principal of KBKG, Tax Credits, Incentives, and Cost Recovery. Previously, Jason was the practice leader of the Accounting, Advisory and Assurance Services practices. His areas of expertise include foodservice, manufacturing, real estate, retail, as well as technology and professional services industries. » Full Bio


  • Do I need to provide a 2019 transcript on my documents if I already submitted a 4506T or do I need to upload both…. But my business didn’t start till 01/06/2020.

  • The blog provides helpful tips on securing an SBA loan during these challenging times. The information about preparing financial documents and maintaining open communication with lenders is crucial for businesses affected by COVID-19. Thanks to the author for sharing these valuable insights and guidance on navigating the loan application process.

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