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In this video, I will show you how to get $10,000 for free for your business today from the government. It doesn’t matter if you are a small business owner, self-employed, or independent contractor, that’s $10,000 you don’t have to pay back. In this video, we will go over who qualifies, what the rules are, and more importantly, I’ll go over the application step-by-step along with all the related forms you have to fill out so you can get this money right away.
Hey everybody, welcome to my channel. I am your host Leo Landaverde. I’m a business coach and outsource CFO, helping you scale your business. If you’re ready to grow your business to seven figures and beyond while creating the lifestyle and the financial freedom that you want, then subscribe to this channel and don’t forget to hit the bell so you’ll be notified every time a new video comes out.
In this video, I’m going to show you precisely the steps you have to follow to get your $10,000 advance on an economic injury disaster loan as we said at the beginning of this video. That $10,000, it’s a gift to you if the loan is not approved. Where does that all come from? Well, what are you looking at right now is the final version of HR 748, which was the final bill that was signed into law by President Trump on March 27th, 2020. It’s called the Coronavirus Aid Relief and Economic Security Act, CARES Act for short.
There’s a few things. We’re not going to go over the 880 pages that this document has. I’ll make it brief. I’ll get to the point. There’s a couple of things that you have to know. There were two major things that came out of this new law, this $2 trillion package. One was the Paycheck Protection Program, which was 350, 347, $350 billion that probably will use up be used up in the first 30 days and they’re probably going to need to get more money. The second one, which is the focus of this video, is the Emergency Economic Injury Disaster Loan Grant, which is EIDL grants for short.
The next of the information is going to be on page 66. I’m going to take it to that right away. Here’s what I want you to, and by the way, the link for this will be down below so you can just click through it and get the actual documents so you can read it for yourself. In page 66, it tells us under section 1110 about the emergency EIDL grants.
What makes you qualified for it? You have to have a business with no more than 500 employees, which most small business owners would be, and that comes from the definition of the SBA, that is small businesses one that has 500 employees or less. B, any individual who operates under a sole proprietorship with or without employees or is an independent contractor. An independent contractor most likely to get a 1099 at the end of the year, so you are eligible to apply.
Let’s read on. Here’s the cool thing about it. Up to $200,000, the administrator shall waive certain things and you will not have to personally guarantee this loan. Loan is up to $200,000. If it is over $200,000, you will have to personally guarantee it. What we’re going to do right now is we’re going to do the short form of how to apply online and then if it is bigger, I’m going to show you what forms you need to fill out. This may be a little bit lengthy video, but stay tuned because I’m going to give you all the information that you need.
First, if it is $200,000 or less, you don’t have to personally guarantee it. The requirements also waived for you to be in business for one year prior to the disaster. The administrator may solely rely on your credit score. This whole thing about you submitting tax returns and all the paperwork is waived, which is really, really cool. This is probably never going to happen again. You need to take advantage of that.
COVID-19, which is what triggered the emergency nationwide, that guarantees you that within three days after receiving your application and you self-certified, which all that means that you have to answer a few questions yourself under penalty of perjury, you will get an amount no more than $10,000, which is the whole purpose of this video so long as you do the application online and you followed certain rules.
If you read here on page 70, it says repayment and applicants are not be required to repay any amounts of any advance provided under this subsection, even if subsequently denied alone. Isn’t that cool? You applied for the loan, the loan gets turned down, you get $10,000, you don’t have to pay it back. You didn’t personally guarantee anything. Please tell me this is not an opportunity of a lifetime if you’re a business owner who actually really needs the money.
What we’re going to do now is we’re going to go over how to actually apply online. You go to sba.gov and you’re going to see this and you just click on learn more and you wait for it to load and you’re going to click on the Coronavirus Funding Options. You click on the link and it’s going to take you to four options, funding options. There is the Paycheck Protection Program. There is the EIDL loan advance, SBA express bridge laws and SBA debt relief. Well, this video is about getting the $10,000 potentially free money, so we’re going to click on this link right here.
Okay. It tells you a little bit about what the overview, which we already kind of went over. In response to the Coronavirus COVID-19 pandemic is small business owners in all US states, all 50 including Washington DC, are eligible for this economic disaster loan advance of 10,000. If you’re a business for less than 500 employees, including sole proprietors, blah, blah, blah. We already covered that. Here’s what’s important. Here is where we click at the bottom, kind of almost at the bottom of the page, you click under to apply for a COVID-19 economic injury disaster loan advance we click here. What happens is it loads up an application. This becomes an online application through the SBA website, and this is the link for sure right here. If you kind of get confused in the process, you know this is the link. I’ll make sure that you have the link at the bottom of this video so you can actually go click it yourself and you can do this on your own. You don’t really need anybody to do this. You can do this yourself.
You have to choose whether you are an applicant with a business with no more than 500 employees, whether you are an individual who is a sole proprietorship, whether you are a cooperative, whether you’re employee stock ownership program, (ESOP) different options. For the purposes of this video, I’m going apply as a business with no more than 500 employees.
In order for you to get to the next phase and the next page of the application, you will have to click on everything that you’re not engaged in any illegal activity, that no principle of the app with a 50% greater ownership is more than 60 days delinquent in child support. Some of those are no brainers, but you will have to click on all of them if you want to move forward. You notice, if not all of them are clicked, this continue button will not be enabled. Now that we click, we’re ready to go to the next page, so that we are now at the second page of which is the business information.
Now for the sake of time, what I’ll do is I’ll pause the video right now. I’ll pre-fill it with some information and then I’ll tell you what happened.
All right, so you’re back. What I did is while I paused the video, I filled it with some fictitious information just to kind of give you an idea of what happens. All the categories are in red unless they’re filled. You notice that you will not be able to move forward unless everything is in green. Put here the fictitious company and LLC, 123 company LLC and the trade name will be the same, in this case 123 company, and then next is either your employee identification number, which is your federal employer identification number, which will be two digits followed by seven digits or your social security number if you are a sole proprietorship. We put that in. We put that in and then the organizational type, whether you are a limited liability, sole proprietor, C-corporation, S-corporation, general partnership, limited liability partnership. For the purposes of this, we are a limited liability company.
Gross revenues for the last 12 months prior to the disaster. You’re looking at your 2019 financial statements and you just pulled that out of your profit and loss. I’m going to put a million dollars here in your cost of goods sold, your variable costs were 250,000 so we’re there. If you have rental properties, you would list them here. These are not required for this, for the sake of this loan right now. That’s not required to move forward.
You would put your primary business address, you will have your city, your state, your zip, your business phone, your business email, the day the business was established, you fill that, and notice that there is a red asterisk there, meaning that it’s required. If you don’t fill it up, fill it out, you won’t be able to move forward. Your current ownership, your business activity. I put business services. There are several categories. I chose this one for myself. None of the options really filled what I do because I am an accountant and have an accounting and advisory firm, so I just put none on the below. Number of employees stand as of January 31, 20.
Now, we’re ready to move forward because otherwise it would be great, so we click on next. Now, we are the third part of the application and here’s when it kind of goes over the ownership of the members of the LLC in this case. I will pause the video. I will kind of pre-fill it, registration purposes and then I’ll be back in a second.
Back. Now, I noticed you notice that everything is now set in green. I filled out all the information pretty quickly. Mobile, title, your percentage ownership. If your percentage owner, if there were more than one owner, you will need to be required to click additional information, but because it is a 100% for this example, you don’t. You put your email, your social security number, your date of birth, your place a birth, whether you are you a citizen or not. You can definitely get this if you’re a legal permanent resident. Put your residential address, et cetera.
Notice that it’s still not blue. It’s still not ready to go to the next page. The reason for that is you have to click here. Is your business owned by a business entity? Say that you had a subsidiary that was owned by a holding company. In that case you would have to click either yes or no. In this case, it’s no, because 123 company LLC is its own entity, is not owned by anyone else. Once we do that, we’re ready to go to the next page. Notice that we already went through the four phases of it.
This is very, very important information. This is where the self-certification comes into place. You have to disclose whether in the past year, have you been convicted of a criminal offense committed during the connection with a riot or civil disorder or declared disaster or engaged in the production and distribution of any product or service that tended to be obscene by any court? You can answer yes or no. Now, I’m pretty sure that if any of the next three questions are yes, you’re not going to get it. Is the applicant or any listed owner currently suspended or debarred from contracting with the federal government? If the answer yes, you may or may not get the money, so it’s no here. Are you presently subject to an indictment or criminal information, arraignment? Basically, are you under any legal troubles with the law, and then you know yes or no. You put no.
This part right here in blue is for anyone who helped you. Now, you can totally do this yourself, but if you needed the assistance of somebody to kind of walk you through the whole process, kind of like can go through with you, you would put that information here. Now, don’t put my information because I’m actually doing this. This is a very fictitious company. Then, you click here because you would like to be considered for an advance. Now, it is guaranteed whether you get the loan or neither, you’re going to get the 10,000, but if you don’t click on the little box, you don’t want the $10,000. You want to click on it. Go ahead and click here. Then, you would put your bank information, your account number and routing number, and then you got to go to the next page.
I’m not going to proceed forward because once you move forward, then it kind of prompt you to submit it, so we’re not going to go ahead and submit this. This is just for illustration purposes. I’m going to pause the video here and we’re going to go to the next phase.
Now, we’re going to be spending the next few minutes going over all the different forms you’re going to need if you’re looking for an economic injury disaster loan that is over 200,000 that you will have to personally guaranteed. It’s a lot more cumbersome. It’s a lot more oneorus. There are more forms. There’s more knowledge. There’s more disclosure. There’s more data that goes into it. I’m going to just kind of walk you through what is needed and then hopefully that’ll help you.
This is going to be you click here. This is going to be an economic injury disaster loan, so you will click here. Now, if you experienced any physical damage, you would click here, but this is most likely because you have to shut your business down or your lost revenue because of COVID-19, then you get to choose whether you are a partnership, corporation, limited partnership, nonprofit, limited liability or trust. You would put your legal name, which is your business legal name, whether it S-CORP, inc, limit of liability, et cetera. Your federal employee identification number goes here, your training, your business phone number. A lot of it is pretty self explanatory.
You would pre who the contact information are for the purposes of the loan itself. The amount of estimated loss in this would be something that you would have to calculate it based on your financial statements. You will tell the SBA, my estimated loss is, I’ve lost $300,000 for the last three months because of COVID-19 and this is how I got to that. You will be seeking for a $900,000 economic injury loan. You have to have all that data ready for you before you actually fill this out. It will be very difficult for you to do anything unless your financial statements and your personal financial statement is done. We’ll go over that next, so that’s the first one is the SBA action form five, the application.
Then, the next one is called EIDL supporting information P019 and then you just have to answer a few questions. Was the business in operation one year prior to the disaster, yes or no? What are your gross revenues, your cost of goods sold? Do you have any rental properties? Lost rents due to the disaster that would go here. Compensation from other sources, then you have to certify it and sign it.
The next form, if you had anyone helping you through this application process and that person is compensated, ie., you work with a consultant, friend, a business advisor, an accountant, an attorney, somebody like me who is a CFO, and we helped you, there are instructions to complete the form so you would have to sign and it would have to be acknowledged that there are no surprises.
Next we go into additional filing requirements. This one has to do with your monthly sales figures. Again, you have to have all of that information. You have to know your business enough to know the sales that you had for 2019, ’18, ’17, your fiscal year, whether your fiscal year ends on 12/31, 03/31, 06/30 or 09/30, all that information will go there depending when your fiscal year ends and all this information is very easily attained if you have your financial statements in order. Whether you work with QuickBooks or any kind of softwares like Xero or any other accounting software, the information, if you kept up with it, if you kept doing your books and you’re closing your books every month, if you’re reconciling should be very easy to obtain.
Here, this should mirror the interim financial statements from your accounting software. This, very easily plug and play your net sales, last year cost of goods sold, your cost of goods sold, your variable costs, that is going to lead to your gross profit, so your net sales mind you knew less of cost. Less cost of goods sold is going to equal your gross profit. Then you have your operating expenses, you just kind of fill it in and you’re going to have a net profit or loss at the end, which is going to tie into your financial statements.
There is more. Here is the most difficult in my experience, the most difficult form that is to be filled out because what this is, it’s your personal balance sheet and profit and loss all wrapped up into one. This is called your personal financial statement. This is standard for any bank to ask you if you qualify for any loan of any size. The formula for the balance sheet is your assets equals liabilities, blast equity, so it’s not called equity. It’s called net worth for when it comes to personal financial statements. You’ve got your assets, whether they are cash, your savings, your IRA, your IRAs, your real estate, your automobiles, everything you tallied up all your asset, it’s going to show up here as your total assets.
Now, you’re going to have your liabilities. Everything that you owe to somebody else goes here. Your accounts payable, if you have personal accounts payable, note payables to banks or others, installment loans, mortgage notes, on-pay taxes, et cetera. What I was saying is that if your total assets need to equal your liabilities, like your net worth, so if your assets were a million dollars and your liabilities are half a million, your net worth will be half a million. This is the part that will be similar to the pure profit and loss. You have all your sources of income that you are receiving and from all sources, your salary, net investment, real estate income and other income, and then you have your contingent liabilities, which is whatever you endorse it or co-make it or somebody illegal claims or judgments, et cetera, description of other income, you will fill that out, payable, your current liabilities and your long term liabilities, and then whether you have stocks and bonds, they would have to be listed here. Your real estate owned, property ABC. If you have more, you would have to add those.
The thing about is you have to be truthful. You don’t want to omit anything. Everything that you’re signing is under penalty of perjury. You have to make sure that you’re truthful with everything so that’s this form, but this is probably the most cumbersome of the forms.
Then, there’s another form called the request for transcript of tax returns, the form 4506-T. This is where the SBA asks you for permission from you to request your tax returns from the IRS and they better match to what you have in your financial statements. It’s very common that I have customers that I work with that the tax returns don’t reflect for their business what they have in their accounting software. You have some explaining to do so. You have to make sure that everything kind of makes sense, that tells a story, that story is coherent.
Last but not least, you have your schedule liabilities when you list your creditors, the original amount, the original date, the balance, whether your current or delinquent, the maturity date, payment amount, et cetera, and how secure. That basically wraps up all the forms that you have to fill out. As you can tell, there are several forms.
Please comment below and let me know what questions you have regarding the loan process and all the forms that we went through, and I’ll be happy to answer them for you. Also, if you want to join a community of like-minded, successful entrepreneurs just like you, then join our Facebook group at the link below where I share tips, tactics, and strategies on how my clients are growing their businesses to seven figures and beyond.
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