The Small Business Administration (SBA) is providing disaster assistance loans for small businesses negatively impacted by the Coronavirus pandemic. Here are some facts regarding the loans for Club Directors and owners of small business considering this option.
Are volleyball clubs eligible to apply for these loans?
It appears clubs are eligible if they have been negatively impacted by the pandemic.
What are the criteria for a loan approval?
Credit History: Applicants must have an acceptable credit history.
Repayment: SBA must determine that the applicant business has the ability to repay the loan.
Eligibility: The applicant business must be physically located in the declared county and suffered working capital losses due to the pandemic.
How much can I borrow?
Eligible entities may qualify for loans up to $2,000,000.
The interest rates are 3.75% for small for profit businesses and 2.75% for non profit organizations with terms up to 30 years.
Also, couples earning under $150,000 are eligible for a payment of $2,400, along with $500 for each child.
How can I use the loan funds?
These working capital loans may be used to pay fixed debts, payroll, accounts payable and other expenses that could have been paid had the pandemic not occurred.
What are the collateral requirements?
Loans over $25,000 require capital. Real estate may be used as collateral. If there is no available collateral then the SBA will sometimes accept a pledge.
What kinds of businesses may apply?
Examples would be, but not limited to, hotels, recreational facilities, charter boats, manufacturers, sports vendors, owners of rental property, restaurants, retailers, souvenir shops, travel agencies and wholesalers.
What other criteria are required?
The applicant business must have a physical presence which must be tangible and significant.
Are there loans available that do not require collateral?
There is a working capital loan that comes directly from the U.S.Treasury that is unsecured. There is no cost to apply and the maximum loan amount is $25,000. You can apply for this loan at DisasterLoan.sba.gov.
Finally, some of us have financed our businesses/facilities via the SBA 504 loan program. If so, you can call the Certified Development Corporation which facilitated your loan and ask for a 90 day holiday on your monthly loan payments. The SBA will reduce the amount of your monthly payment by up to 80%. For example, if your payment amount is $5,000 a month, you would only be required to pay $1000 a month for the three month waiver period.
We, at Munciana, wish for all of our compatriots in the volleyball business the very best as you navigate this crisis. Please remember that tough times do not last but tough people do!
For related business education for Club Directors click HERE.
About the Author
The author, Tim Kuzma, is an entrepreneur and registered Certified Financial Planner. He is a graduate of The University of Michigan, where he played basketball, and is, also, a part owner and Business Director of Munciana Volleyball Club.