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Lee businesses may qualify for ‘injury loans’

By Staff | Jul 31, 2010

Although the Deepwater Horizon Oil Spill has not affected Lee County shores, businesses may have the opportunity to qualify for a low interest Economic Injury Disaster Loan through the U.S. Small Business Administration .
SBA provided an amendment on July 22, for an EIDL Declaration for the state of Florida, as a result of the economic losses believed to be created by the Deepwater Horizon Oil Spill on April 20.
SBA Public Affairs Specialist Carl Sherrill said the criteria for this particular declaration stated that there had to be at least five businesses in the county who had been affected by the oil spill.
He said the process of establishing if there is a need for further assistance in a specific area begins with local county emergency managers requesting additional help, which then goes to the state emergency organization to be approved by the governor.
“It is initiated at the local level and then goes up to the SBA,” Sherrill said.
The EIDL loan offers up to $2 million at 4 percent interest for up to 30 years. The working capital loans are designed to help small businesses that have sales of $7 million or less in a year, Sherrill said.
“Anybody that has been affected, we would encourage them to apply,” Sherrill said. “If I was a business owner and I thought I would be affected, I would apply because I would have funds to draw upon if I needed it.”
This program is just so different from any loan you may have ever applied for,Sherrill said. There is no charge for the application and no up front fees.
He said after an individual is approved for the loan they have six months to determine if they are going to use the funds.
“You are only charged interest for what you use,” Sherrill said.
If your business is losing money from the oil spill and you can show that your business has done less than expected, Lee County Public Safety Public Information Officer Diane Holm said then you have the potential to use one of these loans.
Sherrill said so far SBA has issued 688 applications statewide and have received 225 applications, with a total approved amount of $4.5 million.
Since the close of business on July 25, SBA issued three applications for Lee County and has received one back. There has not been any applications issued for Collier County and two issued and received from Charlotte County.
“There was a need to get some funds in businesses hands quickly so they can begin their recovery,” he said.
Sherrill said there are three different criterium that an applicant needs to meet to qualify for the loan.
First , the business has to be located in one of the counties that was declared, or adjacent to it.
“Businesses in this county would meet that criteria, “ he said.
Business owners who fill out the application also has to have a 2009 tax return filed because a copy of the tax return needs to be submitted with the application.
In addition to the tax return, Sherrill said they also ask the applicant where they are located, the nature of their business and how the oil spill has affected their business and how long they think it will take for them to recover.
“A lot of people still don’t know the answer to that question,” he said.
The last criteria that SBA looks at is the business gross margin to determine the number of months it will take for them to repay the loan. Once that is determined, he said they figure out how much the business owner can afford to pay each month, which will set their term.
Sherrill said since the start of the oil spill no one really knows how long it will have an affect on businesses, so a deferred payment for a year is optional to those who are approved.
For those who are interested in filling out an application can either call the customer service center for a hard copy to be sent to them by mail, or apply online at https://disasterloan.sba.gov/ela
“The electronic application is working very well,” he said, adding that since they handle people on a first-come-first-served basis the turn around is much faster online then through mail.
The deadline to apply for the loan is Feb. 14, 2011.
Although offices have been set up in the Panhandle area for individuals to have the opportunity for individuals to talk face to face with someone, no offices in Lee County have been opened yet, he said.
For an office to be opened in an area, a request must be submitted from the county emergency management, Sherrill said.
For information about the Economic Injury Disaster Loan call (800) 659-2955 or disastercustomerservice@sba.gov .