What You Need to Know About SBA Disaster Loans
We have been receiving a lot of questions surrounding the SBA Small Business Disaster Loan process. The Small Business Administration (SBA) is offering disaster loan assistance for small businesses impacted by COVID-19. Disaster assistance loans will be offered up to $2M, giving small businesses vital economic support to help overcome the temporary loss of revenue they are experiencing in the wake of COVID-19.

In order to access the disaster loan assistance program, the Wisconsin Governor must make a disaster declaration. This has not yet happened in Wisconsin; businesses cannot apply for the loan until the declaration has been made . Businesses who apply for the loan must have a physical presence in the declared disaster area. Click here to keep up to date on where declarations have been made.

General information about the loans and the loan application process is available online . These loans are working capital loans; they are designed to sustain your business in the way it could have existed if the disaster had not occurred (ability to pay accounts payable, payroll, paying fixed debt, and other bills). These loans are not intended to make up for lost profits or to be used for expansion.

Who is eligible?
In order to be eligible, you must fit the SBA's definition of a small business.
  • Common eligible businesses include: recreational facilities, charter boats, manufacturers, sports vendors, owners of rental property, restaurants, retailers, travel agencies, hotels, wholesalers, and more.
  • Private nonprofits - i.e. YMCA, art gallery, theatre
  • Small agriculture cooperatives are eligible, but agricultural enterprises are not
  • Small aquaculture businesses

More about SBA Disaster Loans
  • For these loans, applications are made directly with the SBA - not through a bank.
  • Loans can be for up to $2 million; the maximum amount for an individual business is based on the historical sales of the business as a marker to establish what the business' needs are
  • Businesses can borrow up to $25k without collateral. For those businesses looking to borrow more than that amount, collateral will be required.
  • The loan includes a 4-month payment deferment from the date of the promissory note
  • It will likely take up to 21 days for a loan decision, then 3-5 days to receive the money once the decision has been made if all paperwork has been filed correctly.

Gather Your Materials Now
If you might be interested in applying for an SBA disaster loan once a declaration has been made in Wisconsin, it is best to gather your materials and paperwork now. Here are the materials you will need to gather for the application:

  • Complete loan application form
  • Electronic Loan Application (Form 5)
  • Electronic Loan Application (Form 5C) Sole Proprietorship Only
  • Tax Authorization, which allows the SBA access to your tax records
  • 3 years of tax returns
  • Form 4506-T
  • Personal Financial Statement (Form 413)
  • Schedule of Liabilities (Form 2202)
  • Business information
  • Contact information and social security numbers for all applicants
  • Employer Identification Number (EIN) for business applicants
  • Deed or lease information
  • Insurance information
  • Financial information (e.g. income, account balances and monthly expenses)

The application process is free. It is extremely important to make sure you have a complete application; an incomplete application cannot make it through the process. Online applications are preferred.
The Wisconsin SBDC Network is a proud part of the  Institute for Business & Entrepreneurship  in the  University of Wisconsin System . It is funded in part through a Cooperative Agreement with the  U.S. Small Business Administration.