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SBA Disaster Loan for Nonprofits

Last updated: March 30, 2020 7:40am MDT

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SBA FAQs

Eligibility

What States or U.S. Territories are eligible for an SBA Loan?
As of March 23rd, 2020 all U.S. States and Territories are eligible for COVID-19 Economic Disaster Relief Loans from the SBA.
What nonprofits are eligible for an SBA Loan?
Private Non-Profit Organizations
Examples: Nursing homes, food kitchens, museums, educational facilities, senior citizen centers, daycare centers, playhouses, community centers, shelters, rescue organizations, associations, etc.
An eligible private non-profit organization is a non-governmental agency or entity that currently has:
An effective ruling letter from the U.S. Internal Revenue Service, granting tax exemption under sections 501(c), (d), or (e) of the Internal Revenue Code of 1954, or Satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law.
Are there nonprofits that are not eligible for SBA Loans?
Yes, religious organization are not eligible for SBA loans.

Loan Terms

What are the terms for an SBA Loan?
The SBA is offering nonprofit organizations maximum of $2 Million in funding, a maximum of 30 year term, with an interest rate of 2.75%
Does the SBA require collateral for loans?
Typically, the SBA requires real-estate as collateral. However, in the case of COVID-19 the SBA is often requesting a general security interest in furniture, fixtures, and other assets. If you have none of these items place zero or leave this blank.
How can I use the loan?
Economic injury loans are meant to be for working capital use covering expenses such as fixed debts, payroll, accounts payable and other bills that would have been paid had the disaster not occurred.
Do I have to take the loan if offered?
No, if offered a loan from the SBA you can decline the loan.

Loan Application Process

Can I apply for an SBA via mail?
Yes, you can. However it is highly recommended by the SBA that you apply online as physical mail increases the time to apply and receive loans significantly.
What forms are required to file for an SBA loan?
The initial filing requires the following forms.
SBA Form 5
IRS Form 4506T
SBA Form 2022 – a schedule of liabilities
Complete Copies of the most recent federal tax return
Other forms and reports may be requested after the initial application is filed.
How long does it take after loan acceptance to receive the funds?
Funds can typically be expected within five days after loan acceptance.
If my application gets declined, can I file again?
Yes, you have three attempts at a successful loan application.
Do I have to accept the loan if it’s offered?
No, you do not have to accept the loan when it is offered.
How long after receiving a loan offer do I have to accept or decline the offer?
After receiving an offer, you have 60 days to accept or decline the loan offer. You can request an extension on the time needed to make a decision if you need more than 60 days. If your application decision timeframe lapses you can reach out to the SBA and request that they re-open your SBA Loan application and offer.
If I have access to a line of credit or other debt mechanisms, can I still apply for an SBA loan?
Yes, you can apply for an SBA loan even if you have access to other debt mechanisms.
How long does it take for the SBA to respond to my loan application?
The SBA typically responds between 14 – 21 days after the application is submitted. However, because the COVID-19 Economic Disaster Loan is nation wide, SBA is working on quicker response times.