SBA Loan How-To

Since the recent enactment of legislation providing COVID-19 relief to nonprofit organizations, a flood of information has deluged the Internet and inboxes about how to partake of that relief. Most of that is about the Payroll Protection Program, the forgivable loan available to small businesses including nonprofits.

Unfortunately, some of this information has been incorrect, misleading, and even malicious (e.g., people using this crisis to take advantage of individuals), leading to a great deal of uncertainty for those who wish to apply for the programs. To avoid these dangers, it is important to rely only upon valid sources of information.

What You Need to Know

The first thing you need to do if you wish to apply for the Paycheck Protection Program is to reach out to your current bank. Each bank will have its own procedure for the loan application process. When gathering information for the loan, trust only information from the Department of the Treasury’s website, the Small Business Administration’s website, or your trusted financial institution.

Many nonprofit organizations will want to utilize these relief programs as soon as practicable, however, it is important to do so correctly. The SBA and the Department of the Treasury have released a sample form that approved lenders may use as a basis for their applications. Organizations can use this sample form to collect information, however, when you apply for the loan with your bank, you will need to use the forms they give to you, so the sample is for informational purposes only at this time. Do not submit any forms or sensitive information to any person or institution you do not know and trust.

The SBA has authorized lenders to begin processing applications on April 3, 2020 and eligible borrowers have until June 30, 2020 to apply. In enacting the loan programs currently available, Congress has considered the amount of small businesses that would be applying for these loans. Therefore, Congress believes that every small business that would like to utilize this program will be able to do so and that funds are not expected to run out.

For more information regarding the loan programs and other relief available to nonprofits, please visit our COVID-19 webpage.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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