In 2020, the administration passed an economic stimulus package that provides some safety nets to assist small businesses in surviving the current turmoil in the business landscape. At a hefty $2-trillion dollars, the package is the largest in U.S. history, and with it is sure to come a litany of fine print that can be hard to navigate. Rather than get bogged down in conjecture before the bill becomes law, the best thing a business owner can do in advance of its passage is compile and organize your financial information. ServiceCentral will publish clear explanations to advise you on what the legislation means and is inside soon after it passes.
If your business was not cash flow positive last year and has been around for less than two years, your best option for assistance is likely going to be directly through the Small Business Administration (SBA) and applying for a loan. The SBA is providing webinars on how to navigate this process, and if you are thinking about applying, we encourage you to register for one in your area.
If your business has been around for at least two years and you had a good year last year, you should alternatively consider applying for a loan directly through an SBA lender, as this process will likely be fastest to approval. Your local bank may even be able to provide assistance. Keep in mind that whatever route you choose, you want to work with a Preferred Lending Provider to the SBA who will be able to submit on your behalf for automatic approvals once you are through the underwriting process.
For many small businesses, the process of getting your financial information together for a loan application can be daunting. Below we’ve listed some guidance to help you prepare:
- Three years of personal and business tax returns. Personal tax returns are only required for any individual who owns more than 20% of the company
- Try to get your 2019 tax returns done as soon as possible. If they are not completed, the lender is going to need your 2019 year end financial documents.
- A personal financial statement for any owner who owns more than 20% of the company. A link to download can be found here https://www.sba.gov/document/sba-form-413-personal-financial-statement-7a504-loans-surety-bonds
- A debt schedule for your business. A link can be found here https://www.sba.gov/sites/default/files/tools_sbf_sba202.pdf
- Go into your Quickbooks account and determine your monthly operating expenses from March through August of last year. This data will be an important part of your loan application.
ServiceCentral has compiled this helpful list of State-level financing programs for small businesses.
Go here for an industry guide on the CARES Act, which addresses your eligibility and details of grants and loans.