SBA and Access to Economic Injury Loans

SBA and Access to Economic Injury Loans

3/18/20

On Tuesday, Joseph Amato, District Director for the US Small Business Administration (SBA) shared important information about access to Economic Injury loans through the SBA as a result of the COVID-19 outbreak.
This morning the SBC declared a state of emergency for Nevada which allows for the immediate acceptance of SBA disaster loan applications for Economic Injury. These applications will be processed through the Office of Disaster Assistance (ODA) in Sacramento, CA.
These Economic Injury loans are different from the typical SBA loan as they are being funded directly by the federal government and not through a lender.
The SBA has tried to set up a seamless process for small businesses to apply for financial assistance. You must go to their Economic Injury website www.sba.gov/disaster to begin the application process.
Small businesses and nonprofit organizations are eligible for an Economic Injury loan of up to $2MM with low interest rates (public companies are not eligible for this program).
For-profit businesses – 3.75% Fixed Rate
Non-profit businesses – 2.75% Fixed Rate
$0 Closing Costs for applications through the www.sba.gov/disaster website
  • Size standards are still in effect.
  • You must have an explainable credit history (they will consider medical and other life changes).
  • You must have the ability to repay the loan. Please note that these loans can have expanded terms up to 30 years to keep the monthly payments low.
  • SBA will be required to take all available collateral until the loan is repaid.

The website will help you to determine the loan amount you will need based on factors including your monthly burn rate:

  • Current debt obligations including SBA and 3rd party loans
  • Lease/Rent
  • Fixed liabilities including payroll and benefits for critical employees
  • Costs to not only stabilize your operation but prepare you for recovery
  • Individual contractors are also able to apply

Normally the SBA would fund the above for 3-6 months, however it is allowing small businesses to request up to 12 months. The team at the SBA can help you with calculating your costs to determine how large your Economic Injury loan should be. You will also need to share historical income for the past 3 years with the SBA to help them understand your business cycles to further support your loan amount.

If your small business applies for a loan of $25,000 or less, the ODA will be able to streamline the process without requiring documentation – only a signature – to deliver funds as quickly as possible. All other loans are expected to take between 2-3 weeks from application to funding.

If you underestimate the amount of money you need from this Economic Injury program, you are able to go back and reapply for more financial support as long as the total amount does not exceed the $2MM limit.If you overestimate your costs and borrow more money than you need, there is no penalty for early repayment of the Economic Injury loan.

If you currently have a loan through the SBA, this will not affect your loan limit of $5MM. Regular SBA loans and the Economic Injury loans are funded separately from two different sources.

In the remote chance that your small business is not approved, the SBA is working with banking institutions to find other options to fund your operations to keep your doors open.

Deadline to apply is December 17, 2020.

If you have any questions, please call the SBA District Office at 702/388-3611. Please be patient as they are receiving a high volume of calls.

You can also call the Governor’s Office of Economic Development at 702/486-2700.

The Downtown Vegas Alliance hopes that this information is helpful to you and your business during this challenging time. As we learn more, we will be sure to share updates with our members.

  • Dayvid Figler and Rae Lathrop

    DF: Downtown was great as a kid and it is even greater as an adult. I love all of downtown’s hidden gems, its vibrancy, history and sense of connection. Rae is relatively newer to Las Vegas, but just as passionate about downtown. Downtown lends itself to the shared experience, and as a couple we both love seeing this part of the city through each other's eyes. Photo: Lucky Wenzel

     

  • Rob Ponte

    Some of the best nights I’ve experienced started out with no plan other than walking around to check out what’s going on. The great thing about having so many bars and restaurants downtown is the ability to move around if you’re not feeling the vibe in one place. There are plenty of options just outside the door. Photo: Lucky Wenzel

  • Brandon Wiegand

    The downtown Las Vegas of today has much to attract residents - a burgeoning restaurant and nightlife scene, growing diversity of businesses, and major centers of art and culture. Plus, living downtown I am easily within walking or biking distance of it all. Photo: Lucky Wenzel

  • Hank Gordon, Chairman of Laurich Properties

    It is always a pleasure to deal with the city of Las Vegas’ economic development department. The staff is really interested in helping create a positive business environment to work with.

  • Jonathan Jenkins, Founder & CEO of OrderWithMe

    As our company continues its rapid growth, we quickly realized the need to set up a formal U.S. headquarters. We explored multiple cities and were about to make the move to San Francisco, and then we heard about the complete reinvention of downtown Las Vegas. Coming from China where things are booming and growing, we love that downtown Vegas now has a similar vibe of energy and change. Not only is there an exciting tech community here and much lower costs than the Bay Area, but we love the fact that almost every industry group brings their conventions to our front door once a year.

  • Andy Hsieh, Owner of Lux Delux

    We love the vibrancy and energy of Las Vegas, and downtown is at the heart of it all. That's why we've launched our mobile platform with a focus on downtown. This is an exciting time in Las Vegas history, where community, commerce and technology are all converging at once. Downtown is our city's hidden gem.

  • Ramesh Srinivasan, Chief Marketing Officer & Head of Partnerships of SocialWellth

    We chose to relocate from the suburbs to downtown for several reasons. Our brand image and that of downtown’s mesh perfectly. The new downtown Las Vegas reflects a more hip, startup, social media-style image. Additionally, downtown’s emerging technology corridor, anchored by Zappos, is an environment that enhances our ability to recruit the types of technical skill sets required for our continued growth and success.

  • Mark Brandenburg, President of Golden Gate

    I think downtown Las Vegas is a unique blend of intimacy and great energy. Plus, in contrast to The Strip, it’s so easy to walk around…The Golden Gate has been here for over 100 years and with all the changes going on downtown, it feels like a new era. It truly is a renaissance—the rebirth of a classic.

  • Roberto Mendoza, Co-owner of Banger Brewing

    The city has been great in helping us with the licensing and procedures necessary to start a business. There hasn't been a brewery built in the city of Las Vegas for probably 10 years. So for them it hasn't been a typical ‘cut and paste’ thing. We're something different. It was a team work process to get us opened – a lot of talk and listening on both sides. And now the city started opening up the doors for other breweries once we were up and running. Good news for us and good news for the future. (Photo: Lucky Wenzel)

  • Alexandra Epstein, Executive Vice President of El Cortez Casino Hotel

    This downtown area… is emerging and where many events are happening.

  • Meghan Mossler, Owner of Stitch Factory

    The city and the department of economic development have been very helpful to us and all the other downtown business owners. It’s such a community here, and everyone asks you what you need. That kind of help launching a business is amazing and priceless.

  • Pamela Dylag, Co-owner of Velveteen Rabbit

    The city is so supportive of new businesses. Things are popping up constantly. (Photo: Lucky Wenzel)

  • Marc Abelman, CFO & Co-owner of Inside Style

    Downtown is becoming very much in demand…there’s a limited supply. Run fast, don’t walk.

  • Sam Cherry, CEO of Cherry Development

    For a while, downtown was one of the only places in the valley you would see cranes when you drove around. It was nice that city government stepped up and the private sector married with the public sector to create amazing projects that filled the gap. That was very important for us.

  • Johnny Jimenez, Owner of Toy Shack of Las Vegas

    Our business is booming amid the foot traffic on Fremont Street, and we’ve started to see how tourists are falling in love with downtown as they discover it. In the past year, we’re increasingly hearing things like, ‘Wow, next time we’ll stay downtown instead of on The Strip,’ or ‘We’ve visited downtown many times, but this is the first year we’ve actually stayed in a downtown hotel.’ They like that there is more to do within a smaller walking radius.

  • Rich Worthington, President and CEO of The Molasky Group of Companies

    Historically, downtown Las Vegas has not been a top destination for many locals, but in recent years… that trend is reversing itself. Given all the recent openings and progress, there’s much to explore and experience downtown.