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Sean Kouplen: Here’s what you need to know about Small Business Administration loans

From the Tulsa World

We all know how much northeast Oklahoma businesses are struggling right now. Some businesses have been forced to close; many have lost clients; and others are having supply chain issues. Virtually every major industry is experiencing challenges.

Two federal stimulus programs recently launched by the Small Business Administration may be the best opportunity for many small businesses to survive. Businesses may apply for both programs, and I encourage all small businesses to do so.

Both programs are a much-needed source of capital and liquidity during this uncertain time.

The SBA Disaster Loan Program — Economic Injury Disaster Loans

This program provides low-interest loans for working capital to businesses suffering economic injury from COVID-19. The program provides loans up to $2 million based on the borrower’s need and ability to repay.

For this program, businesses apply online at Just click “Apply Online”; click Register to set up a user name and passcode, and then start the application.

Applying businesses don’t actually enter a loan amount. You will enter your financials, including projected losses, and the SBA will calculate the loan amount for you. Rates are 3.75% for for-profit businesses and 2.75% for nonprofit businesses, and this product is a line of credit that can be advanced and paid back as the business sees fit.

The SBA will underwrite these loans differently based on size, credit score and the borrower’s need. The smaller the loan, the greater the need and the stronger the business, the faster the decision. SBA will often make an immediate loan of $10,000 that may be forgivable. Once a business is approved and awaiting final funding, many banks will make bridge loans to borrowers that can be paid off when the final SBA loan is received.

Churches, farms, ranches, marijuana businesses and sole proprietorships do not quality for this program. All other industries qualify if they meet the SBA size restrictions. You may review the SBA size standards table at–table-size-standards. Just enter your NAICS code to find the size limit for your industry.

Due to the overwhelming demand for the program (300,000 to 500,000 businesses are expected to apply), the site can be slow. So we recommend that businesses complete and upload the application during off-peak times, such as late at night or very early in the morning.

CARES Stimulus Act Paycheck Protection Program

The Paycheck Protection Program is part of the new $2 trillion stimulus package.

This program will be offered through participating local banks so the disbursement should be faster than the Disaster Loan program. Through the program, the SBA loans businesses 2.5 times their average monthly payroll (up to $10 million per business).

If you maintain your pre-COVID-19 employment levels, keep employee pay at 75% or more of their prior salary and use the loan proceeds for approved purposes, the loan will be completely forgiven. Businesses will not have to pay it back, and their only expense is a minimal 0.5% interest.

If employment numbers decrease from prior to COVID-19 levels or salaries drop below 75%, a portion of the loan must be paid back over a two-year period.

This program will be available until June 30 and has funding at $349 billion, which is the estimated eight-week payroll amount for U.S. small businesses. The loans have a 100% SBA guaranty and will be unsecured with no personal guaranties required. There will be no guaranty fees or ongoing servicing fees on these loans.

This program is offered to all businesses with fewer than 500 employees, and employment over 500 is allowed if your business is classified in NAICS code 72 (restaurants, food service, hospitality) and has fewer than 500 employees per location. Virtually all industries may apply for this program, including for-profit and nonprofit businesses (including churches). Marijuana businesses and 501(c)(6) nonprofits do not qualify.

All loan proceeds used to cover payroll, rent, mortgage interest payments and utilities during the eight weeks after the loan is received will be forgiven. Payroll expenses do not include taxes but can include retirement and insurance payments, 1099 payments and part-time employees. This debt forgiveness is not taxable to the business.

These are uncertain times, and business owners need all of the capital sources they can get. For more information on these programs, please visit or contact Ray Little with the Oklahoma Department of Commerce at

Sean Kouplen is Oklahoma secretary of commerce and workforce development. He is also the chairman and CEO of Regent Bank with locations in Tulsa, Oklahoma City, Nowata and Springfield, Missouri.

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