How to Apply for a Small Business Loan in Idaho

Idaho

According to AP News more people have filed for unemployment in Idaho in the last 4 weeks than applied in all of 2019. And the bad news doesn’t stop there. The COVID-19 pandemic has had a devastating effect on the state’s small businesses, with many struggling to keep afloat. If you’re a small business owner in Idaho who’s been affected by the crisis, a small business loan could prove all the difference between sinking and swimming. Since March, business owners unable to meet operating and payroll expenses have had the option to apply for two new loans via the Small Business Administration (SBA) – the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). While both programs have exhausted their initial wave of funding, new funds are expected to be released on 27 April. With the SBA treating applications on a first-come, first-served basis, the sooner you get your application in, the sooner you stand to benefit.

What You Need To Know About The Economic Injury Disaster Loan (EIDL)

Before you begin your application for the EIDL, take some time to research the eligibility requirements and small print. In order to qualify, your business will need to fall into the definition of ‘small business’ according to SBA standards. This includes:

  • Small businesses (including sole proprietorships) with 0 – 500 employees
  • Businesses with 500 plus employees who meet the guidelines of SBA’s Size Standards
  • Independent contractors
  • Cooperatives and employee-owned businesses
  • Private non-profits
  • Tribal small businesses
  • 501 Veteran organizations
  • Your business will also need to have been in operation since at least January 31, 2020, and have suffered temporary financial loss as a result of the COVD-19 crisis.
  • If you pass the eligibility requirements, you’ll qualify for a loan of up to $2 million. The loan is intended specifically to cover operating costs (mortgage interest payments, rent, utilities, etc.) and payroll expenses (compensation, salaries, healthcare benefits, retirement benefits, and severance pay) that the business could otherwise have covered had it not suffered revenue loss as a result of COVID-19.
  • A few additional pieces of information worth noting prior to applying include:
  • Interest is fixed at 3.75% for businesses and 2.75% for non-profits.
  • Principal and interest payments may be deferred for up to 4 years.
  • Loan terms are available for up to 30 years.
  • Borrowers may request up to $10,000 as a forgivable advance on the loan, payable as a grant within 3 days of loan approval.
  • No personal guarantee is required on loans of up to $200,000.
  • No collateral is required on loans of up to $25,000.

How To Apply For An Economic Injury Disaster Loan In Idaho

Regardless of state, all Economic Injury Disaster Loan applications are administered directly by the SBA.

  • To begin the application, visit the SBA portal. From there, complete the prompts as directed. As part of the process, you’ll be asked to:
  • Confirm Eligibility: The first part of the application will ask you to self-verify that your business meets the eligibility criteria outlined by the SBA. This includes complying with certain standards regarding the size of operation, business type, and sector.
  • Confirm Business Information: The next stage of the application will ask you to confirm business-specific information, including legal and trading name, SSN or EIN number, gross revenue for the year Feb 1, 2019 – Jan 31, 2020, and the total number of paid staff.
  • Confirm Ownership: If your business is wholly or partially owned by another entity, you’ll be asked to verify their information. They will also need to provide a signed loan guarantee.
  • Confirm Any Criminal Activity: If the business has any criminal history that may prove relevant to your application, you will be asked to declare it. Should the business have had any prior dealings with federal agencies, you will also need to confirm the reason and scope of those interactions.
  • Submit: Before you submit your application, you will be asked to confirm whether you would like to receive up to $10000 of the loan as a forgivable grant. If you confirm you do, the grant will be paid within 3 calendar days of your loan being accepted.

What You Need To Know About The Paycheck Protection Program (PPP)

Like the Economic Injury Disaster Loan, the Paycheck Protection Program (PPP) is administered by the SBA and designed to meet the immediate needs of small businesses struggling to meet payroll costs. The loan can also be used to cover:

  • Commissions and other forms of compensation
  • Paid vacation, parental, family, and healthcare benefits
  • Retirement benefits
  • Operating costs such as rent, interest on mortgage payments, and utilities

The maximum amount of loan that can be drawn is $10 million, but entitlements will vary according to your usual payroll costs. To estimate the amount you can request, divide your payroll costs by 12, then multiply by 2.5.

In terms of the small print, chief points to note include:

  • Loans can be forgiven if all employees are kept on the payroll for eight weeks and a minimum of 75% of the loan is used for payroll.
  • Loan payments will automatically be deferred for six months.
  • Zero administrative fees will apply.
  • No collateral or personal guarantees are required.
  • Loans have 2-year terms and an interest rate of 1%.

Businesses can apply for both an EIDL and PPP, but can not use both loans for the same purpose (e.g. If you use the PPP for payroll expenses, it’s expected that the EIDL will be used against operating costs only).

How To Apply For The Paycheck Protection Program In Idaho

Applications can be made to any participating SBA 7(a) lender, federally insured depository institution, federally insured credit union, or Farm Credit System institution. A full list of participating lenders in Idaho can be found at sba.gov. To apply, simply download and complete the SBA Paycheck Protection Program loan application form, and submit to your chosen lender together with your payroll details.

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