[WestCoastFunding]

is the SBA Economic Injury Disaster program going to really help? It allows for up to $2m to assist overcome temporary relief of loss of revenue and helps pay fixed costs such as payroll , accounts payable. the interest rate is suppose to be 3.75% and out to 30 years max .

So here's the thing: that program has been traditionally used to deal with economic disasters involving personal property destruction. So the employees weren't really underwriting business loans, so much as visiting properties, snapping pictures and writing checks. Only 10% of the claims were for 'economic injury" related to businesses. On average, the time from application to funding would take 4 weeks. And how often were these SBA "loan officers" working on these things? Every few years? Every 10 years in certain regions? There is a limited staff.

Now, these same loan officers have to fully-underwrite business loans for the bulk of the businesses in the country. There is no way they have the staff to handle this. They are going to be completely overrun and overwhelmed. And while there has supposedly been $50B put towards the program, only about $9B has actually been allocated.

In theory they could offer up to $2M, you will only get $25K at closing, and then you are reevaluated thereafter (taking up more underwriting time). How soon will they blow through $50B? That will go like nothing although theres talk they will increase the budget to $250B. Sure, the terms could go as long as 30 years but you'd be lucky to get terms longer than 5 (if that). You also have to prove that your business has taken economic injury, which shouldn't be too hard. But then you also have to prove that credit isn't available for you elsewhere.

I have multiple clients working with this program now. One has had decent numbers over past few years, so they are making him match with 7(a) lenders on their "lenders match". Only if he is declined for the 7(a) will he be eligible for the Disaster loan program. This could drag on for him for at least 2 months, but he's got a strong company. A company that is struggling day-to-day to make it can't wait 4, 5, 6, 7, 10 weeks.