On Thursday, March 18, 2020, the United States Government (through its Small Business Administration “SBA”) approved Arizona Governor Doug Ducey’s request to qualify all of Arizona for the SBA’s Economic Injury Disaster Loan program. Small businesses in Arizona may now apply for SBA loans for economic injury incurred as a result of the spread of the Coronavirus, and its related illness COVID-19. The government estimates that up to $50,000,000,000 will be available under this program.

WHO MAY APPLY?

• Any business otherwise eligible for an SBA loan located in a jurisdiction declared a disaster area as recognized by the United States Small Business Administration¹.
• Business involved in: (i) agriculture; (ii) charity; (iii) gambling; (iv) cannabis; (iv) casino/track betting; (v) religion; and (vi) other excluded businesses,² are not eligible for loans under the SBA disaster relief program

HOW MUCH MONEY MAY BE OBTAINED/TERMS?

• The updated program will allow loans of up to Two Million Dollars ($2,000,000) for qualifying businesses at a 3.75% interest rate (for-profit businesses). The particular terms of the loan will depend on the business. The repayment terms vary on a case by case basis but can be up to 30 years. Currently the SBA is offering a one-year deferment on any payments.

WHAT MAY THE PROCEEDS BE USED FOR?

• Short terms debts
• Payroll
• Accounts Payable
• Other Bills

HOW TO APPLY / WHAT IS NEEDED TO APPLY?

• To apply a business may go to sba.gov (make sure to only apply for “Economic Loss”) and select the appropriate Arizona County when applying.
• Borrowers will need to complete a loan application and provide: (i) a tax authorization; (ii) tax returns of the business; (iii) schedule of liabilities of the business; (iv) personal financial statements of the owner of the business; and (v) customary financials of the business (balance sheet, income statement, cash flow statement).
• On average, it takes between two and three weeks for the SBA to process and fund an application, but clear-cut applications may be approved quicker.

¹ Business may need to demonstrate a lack of availability to acquire other financial assistance.
² Real estate investment companies, companies involved in speculative activities, dealers of rare coins and stamps, companies whose stock trade is money, multi-level marketing companies, and most lobbying firms.

The attorneys at Jennings, Strouss & Salmon, P.L.C. are ready and available to assist small businesses with applications or other legal needs during this turbulent time. If you have questions about this, please contact Jeremy R. Jarrett or John C. Norling.

ABOUT THE AUTHOR

Jeremy R. Jarett | Read Bio

For over 75 years, Jennings Strouss has been dedicated to providing clients with strategic legal guidance to help them seize every opportunity. The firm is well-known for its rich heritage, commitment to community, and long-lasting relationships. We have a deep understanding of business and law. When you work with us, you’ll have a team of legal experts who are dedicated to your vision of success.

Through our offices in Phoenix, Peoria, and Tucson, Arizona, and Washington, D.C., we leverage resources both regionally and nationally to serve our expanding client base. Jennings Strouss is deeply rooted in each of our locations’ legal and business communities, and especially instrumental in helping shape the dynamic growth of Arizona and many of its institutions. The firm promotes a pragmatic, results-oriented approach, coupled with a healthy, well-managed, and friendly atmosphere of collaboration.

Our primary areas of practice include advertising and media law; agribusiness; automobile dealership law; bankruptcy, restructuring, and creditors’ rights; construction; corporate and securities; eminent domain and condemnation; employee benefits and pensions; energy; estate planning and probate; family law and domestic relations; finance; healthcare; insurance defense; intellectual property; labor and employment; legal ethics; litigation; medical malpractice; professional liability defense; real estate; surety and fidelity; and tax.

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