How to apply for SBA EIDL reconsideration if your SBA loan application is denied?
The SBA EIDL loan application for your business was denied. How to apply for an SBA EIDL loan reconsideration, including for US businesses that are foreign-owned by individuals who hold an E-1, E-2, L-1, O-1 visa or are in the process of adjusting status to a permanent resident through EB-5, EB-1 and other programs?
Due to the ongoing Coronavirus pandemic, U.S. Small Business Administration (SBA) has issued in March 2020 disaster declarations of economic injury for all US states and US Territories for the COVID-19. As a result, the SBA Economic Injury Disaster Loan (EIDL) has been made available to small businesses and non-profits to help recover from COVID-19, a declared disaster, and assist with financial resources and support they need to recover from temporary loss of revenue. The EIDL loan is available for qualifying small businesses and non-profits, including US agricultural businesses that have been in operation on January 31, 2020.
US businesses that qualify, regardless of where they are located nationwide, can apply for the EIDL loan. The SBA requires the applicant business to provide a number of documents with the EIDL loan application including a completed and signed application form, copies of the most recent IRS income tax return for the business, schedule of liabilities and personal financial statements for the owners of the applicant business. The SBA loan officer can further request additional documents for the business including profit and loss statement, balance sheet, monthly sales figures and other relevant documents for the owners.
The EIDL loan is evaluated on a case-by-case basis and can be denied for a number of reasons, including fico score, the ability of the applicant business to repay the debt, failure to provide required documents or other requested information, eligibility issues and others.
Recently, the SBA has also denied EIDL loans for US businesses owned by foreign nationals on visas such as the E-1, E-2, L-1, O-1 and others in process of obtaining a green card. Some of these businesses have been denied the EIDL loan amount from the start without being offered a loan amount and other foreign-owned US businesses have been denied the loan after being offered a loan amount because the business owner is not qualified to receive the loan or not qualified to receive a federal public benefit under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) or told that the information is unverifiable.
After SBA review, all applicants denied the SBA EIDL loan are notified in writing of the specific reasons for the denial and are given an opportunity to ask for review of the loan application. If you were denied an EIDL loan for whatever reason, including owners of US businesses who are on a E-1, E-2, L-1, O-1 or pending permanent residency, you can find the steps on how to apply for an EIDL reconsideration:
- Request reconsideration. If your EIDL loan was denied for any reason (except size), you can request reconsideration of your EIDL denial.
- Submit your EIDL reconsideration on time. You must submit your request for reconsideration in writing as soon as possible, but the SBA’s Disaster Assistance Processing and Disbursement Center (DAPDC) must receive your reconsideration within 6 months of the date of the decline notice. You should check your declination date to how much time you have to present information to overcome your denial and when the 6-month deadline comes due. After 6 months, a new EIDL loan application is required. You can submit your request via mail, fax or e-mail as indicated in the decline letter.
- Provide relevant information or documents with your reconsideration request. You should submit your EIDL reconsideration on company letterhead (applicant business letterhead) attached to your e-mail or via fax or mail. You must provide with your reconsideration all significant new information, documents or reasons that you rely on to overcome the denial of your EIDL original loan application. Your reconsideration of a business loan application must also be supplemented with current business financial statements. Your reconsideration should be dated and signed.
- Appeal in writing within 30 days (receipt), if your application is declined a second time. If your application is declined a second time, you can appeal in writing to the Director of the Disaster Assistance Processing and Disbursement Center and the appeal must be received within 30 days of the decline notice. In your appeal you must state that you are appealing the denial decision and you must give specific reasons as to why the Director should reverse the decline. The Decision of the Director is final, unless the Director does not have the authority to approve the requested loan, the Director refers the case to the Associate Administrator for Disaster Assistance (AA/DA), or the AA/DA upon a showing of special circumstances, requests that the Director, DAPDC, forward the matter to him or her for final consideration. Special circumstances may include, but are not limited to, policy considerations or alleged improper acts by SBA personnel or others in processing the application.
- Consider legal action. If you are not successful, you can consider legal relief with the courts.
How can Malescu Law help you?
At Malescu Law, our business corporate and immigration lawyers in Miami, Florida can assist you with planning based on your case, preparing and filing requests for EIDL reconsideration with the SBA, advise you with the appropriate steps to take based on your specific circumstances and SBA replies, preparing and filing EIDL appeals for the SBA or help with any other legal arguments and related filings relevant to your case. Contact now our experienced business corporate lawyers in Miami, Florida.
Malescu Law P.A. – Business & Immigration Lawyers