Are you scared to get started? Does it seem to good to be true? Well it's not. Here I walk you through the very easy, very straightforward SBA EIDL streamlined application process to get up to $10,000 advanced to your business or nonprofit within 3 business days. Watch the walk through and work the application. You got this!
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From the SBA:
“In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid. Economic Injury Disaster Loans are also available to residents in declared disaster areas.
You've decided that your business qualifies, you've decided that your nonprofit has expenses that would be forgivable and you want to apply for this award, this loan. You want to get the ball rolling, you're going to use the streamlined application process in. The first place you're going to go is to www.sba.gov/disaster where you're going to see this screen. Now. The streamlined application is very quick and you just basically go into it and say to apply for a COVID-19 EIDL loan. Click here.
And we've now opened up the streamlined process. The streamlined process was just released on Monday, March 30th. So today is March 31st and I am recording this video to help folks understand how to go through this process. This video will be keyed for my nonprofit folks. I will do a second video that is not focused on nonprofits, but first we are going to go through the nonprofit applying for this disaster assistance.
Now, what I recommend is that you pause for a minute, go get your financials in order so that you understand what your gross revenues were for the last 12 months. And then make sure that you have your tax ID number handy and then we can go ahead and get started. And I don't want you to freak out too much because even if you have to like abandon this in the middle of it, it's really not that long. It took me about five minutes to do it for my own business and I did it from my phone. So this is not that big of a deal. People are just really nervous about filling out the application. It feels very uncertain. And so I just want to show this video that it is simple and I can just walk you through all of the steps so you don't need to be scared to go forward. So the first thing we are going to do is we are… Now it might be tempting to select we're a business with less than 500 employees, but we're going to actually select applicant is a private nonprofit org with a 501c status, okay? So that is what we're going to choose because we are applying as a nonprofit entity.
Now, this section, this is one of those things where we want to check all the boxes, right? We're not engaged in any illegal activity. We don't have any, you know, bad debts. We don't make porn, we don't have gambling, we're not in the business of lobbying. Now, nonprofits, I don't want you to freak out about this just because you might do a little bit of government advocacy. If you are not a super PAC, you're fine, okay? If you're just a garden variety C3 and you occasionally advocate on an issue, it's not a substantial part of your operations. Don't worry about this. This is trying to say, if you are a lobbyist and that's your job, we're not trying to give you stimulus money, lobbyists, okay? They're trying to say this is not for you. All right. And then we're going to click next and now this is just some basic business information.
You can do this, right? So we're just going to go ahead and fill in our business name. A DBA, if we have one. We are not going to use a social security number because nonprofit entities are not sole proprietorships. We have a tax ID number. That would be on your IRS paperwork in any number of places. You could say C Corp or you could just say other. That's fine. Okay. So we've got that much filled out. Are we a franchise? No. And then we're gonna put in our gross revenues for the last 12 months, the 12 months prior to the date of the disaster, which conveniently is January 31st so we're basically looking at your 2019 calendar year or just through January 31st, 2020 for the last 12 months. You should be able to pull a report out of your financial software, your accounting software. If you can't do that, all right, we'll have another conversation cause you should be able to pull these numbers pretty easily.
Then you've got your cost of goods sold. Now this is kind of a for-profit-y way of talking about this. You may need to contact your bookkeeper, look at your balance sheet and your income statement. This is something that should be on your financial reports, but we might call it something else in nonprofit land. So just check in with your CFO or your bookkeeper or your treasurer and figure out what number you need to put in that line. And as you continue down here, you'll see these items that are not in red. These are not required. So that's where we need to read and see, does any of this actually apply to my organization? So have you lost rental income because of the disaster? If your tenants are not paying you, you can put that number in here. Your nonprofit cost of operation for the 12 months, that's a number that you need to enter because you are a nonprofit.
This next one. If you are, if you are a faith-based entity, they want you to answer this one. If you're not a faith-based entity, then just skip it. It's written really poorly. So if you have questions about this, call your advisor so that you can discuss with them what your secular social services are because this only applies to faith-based entities that do secular social services. Then we're looking at if you have any compensation from other sources that you have already received as a result of the disaster. Most nonprofits are not going to have other relief money that has come in. And if you are worried about it and you have something, maybe somebody gave you donations and you want to put that in here, you can describe what that is. Then you need to give your physical address, not a PO box. And just some basic contact information phone, the date you were established.
That would be with your secretary of states or your state registrar's office. You can often just pull that up online if you don't know. Otherwise, you would look at your copy of your articles of incorporation for that date. And then the business email will be the person who you want to receive any updates from the SBA about your process. Current ownership since… Now this is a little bit tricky for nonprofits because obviously nobody owns the nonprofit. So just I would say go ahead and put the date established here. Unless you've gone through a merger, then you could put the merger date. But for most of us, this is going to be the same information because we don't, we don't acquire businesses in nonprofit land. If you have gone through a merger, just put the merger date in there.
Business activity, we're going to choose from a list. Right. And just pick the thing that works for you. Just pick the thing that fits the best. They don't have sort of an other category, whatever. That's what they gave us. And then obviously, so like, let's say that we just pick educational, they give us some options, which may not fit your mission. So it's okay to just say none of the above and then however many employees you have as W2's, you will enter here and then you will click next.
Okay, so here we are at the next page. Now is your business owned by a business entity? This you would only check if you are like the subsidiary of another nonprofit, not, don't worry about it if you're a wholly incorporated affiliate of some national group, only worry about this if you really are a wholly owned subsidiary of another nonprofit. And if you are, you probably already have some highly paid lawyer working on this for you.
So we're going to go ahead and say no because most of the people I think watching this are very small nonprofits that don't worry about that issue. Okay? Now here's where it gets a little bit tricky because, government. They want you to list individual owner agents. Obviously, you know, nonprofits do not have owners. There are no stakeholders- or there are no shareholders, only stakeholders in nonprofit land. So we are actually saying an agent. So we're going to pick like our board president or our board chair. And put in an officer of the corporation here. So when it comes to their title office, so we're going to just go ahead and say other, and we're going to go ahead and say 0% ownership because we do not actually own anything. Can either add more board members, but I just really wouldn't bother because it's not necessary. And then just click next.
All right, now we've just got some questions about, have you been convicted of a crime? Have you been debarred or disallowed from receiving any federal grants or loans? Hopefully your answer is no to all of these things. Okay. And then as long as you didn't have anyone complete this for you, this whole section just remains blank. And then here is where you ask for the advance. I would like to be considered for an advance of up to $10,000. Check the box and then you will put in your bank name, account and routing and transit number. And then these are the certifications that you make. Okay. So a couple of things about the certifications.
First of all, you're verifying obviously that the information that you put in is correct and you're also giving them permission to pull any records from your organization that they can, right? So that's just something to be aware of that this is effectively probably authorizing some sort of check on verifying that you exist, verifying your records with the IRS, etc. So the other thing to know is that, remember we talked about what you can use this money for. You should be using it for things that would qualify for the EIDL loan in the first place. So you do make a disclosure here that you understand that if you misapply the proceeds of the loan and like have a pool party or buy, you know, three pounds of weed or something with this money, that you would actually owe one and a half times the original principal amount that they give you. So that is just, that's the catch that you are supposed to spend this money on your payroll, utilities, your rents, your health benefits, things that we discussed in the other video about what this money is supposed to be used for.
So this is the part where you are verifying that you really believe that you are entitled to this and will use it for proper purposes. And once you click, I hereby certify, then you move forward. Now, submitting this request does start the full application process. So up here where it says additional information may be required prior to loan closing, you need to understand that filling out this request for an advance is also starting the loan application process. Now you may not be successful with the loan, and that doesn't matter because if they give you an advance, you get to keep it regardless of if you qualify for the loan in the end. But, just so that you are aware this does begin an application process, but you are not obligated to take the loan if it is offered to you.
So I hope this was helpful. I hope that gives you some comfort for walking through this when your nonprofit is considering this. It's a really unique situation that we're in and if you need any help, you can find me at birken-law-backup.local. I am happy to work with any nonprofits that are struggling on how to figure out this strange time that we're in. So get ahold of me on my website and good luck to you all out there.