High Rock Accounting, the firm where I serve as CFO, regularly assists clients with cash flow planning, strategy and management. We give people advice all day long on how to maintain proper cash flow levels when faced with growth, unexpected business events and (of course) economic downturns. But what we don’t often stop to ponder is: Who does High Rock turn to when we are faced with these same challenges?
At High Rock, we pride ourselves on planning well into the future as it relates to our cash flow needs. It’s even one of our specialties as a firm! However, in full disclosure, this economic downturn related to COVID-19 simply caught us off guard in a way few external factors ever do. And while our internal planning allows us to weather a storm like this in the short term, none of us really knows how long or how dramatic the economic impacts of this pandemic may be. And because High Rock is in the business of client service, this means we are impacted by uncertainty when we look at our operations internally and also when we look toward our clients’ operations. That uncertainty also translates to prospective clients who are cautiously observing the same economic outlook as we are.
As a result, High Rock determined the best course of action given the current state of the economy was to apply for the SBA (Small Business Association) Disaster Relief Loan Program. We documented our experience to share with others who may find themselves in similar situations. Please read below to learn how the process went for us.
1. The waiting game
The earliest date that small businesses were able to start submitting applications for disaster relief related to the COVID-19 pandemic was March 12, 2020. However, as of 8:00 a.m. (PT) on Monday, March 19, the COVID-19 disaster relief funds had only been released for a select few counties in Arizona (our home state). After checking the site regularly on the 19th, I was finally able to apply around 3:00 p.m. However, this is not where the waiting game ended.
Due to the high volume of traffic hitting the site, each page generally took between 30-45 seconds to load (some took more than a minute). That may not sound like a lot at face value, but there are quite a few screens you necessarily have to click through as the application progresses. Also, I got quite a few error messages for pages that wouldn’t load when I first tried to access them. Navigating backward or reloading the page generally fixed these issues, but this also took about 30-45 seconds each time. All in all, what likely would have taken me about 30-45 minutes to complete at normal browsing speed ended up taking a full two hours.
After about 5:00 p.m. PT on the 19th, the browsing speed did increase. As of early morning on March 22, the site appeared to be moving at what I would consider a normal browsing speed. This may indicate that the site is working more efficiently now, or just that business owners are not applying at the same volume outside of business hours. Hopefully, it is the former. In any case, be sure to set aside a good amount of time to complete the application. While there is an option to save your progress and access the site later, this application really can (and should) be done in one sitting.
As a side note related to technology: I had to use two different browsers at one point during the application. I’ll discuss more below, but the tax form authorization required can be provided via e-signature by the business owner who is filling out the application. However, when I tried the e-signature option on Google Chrome, it did not work. I had to reload my application on Firefox to complete this portion.
2. Getting registered
The first step of the application is to register on the SBA Disaster Loan website (
Be sure to first check the eligible areas, as you will not be able to proceed with the application in an area where the COVID-19 disaster relief program has not been approved.
Once you’ve confirmed you are in a location eligible for assistance, you need to register your business. This is a very simple process whereby you provide some personal information (such as date of birth and social security number) and your business address.
Be sure that the individual registering for the application has proper authority within your organization to sign documents, such as tax transcript authorizations.
After registration is complete, you can begin your application.
3. The application
As a CPA who has had to deal with many state and federal governmental bodies over the years, the SBA made the online application process pretty straightforward. Aside from the lag in browsing speed, the deliverables they request are relatively light from a due diligence perspective, and should be easy to provide by companies who maintain proper records. It should be noted that this same application can be submitted by mail, or in person at an SBA office. I did not attempt either mail or in-person applications, but the documentation needed should be the same.
To complete the application, you will need:
- Completed SBA Form 5 (U.S. Small Business Administration Disaster Business Loan Application). This form provides basic information about the business, including address, organizational structure (LLC, LLP, C-Corp, etc.) and ownership structure. Make sure to include all owners on this form, as they will also need to provide a signed tax transcript authorization form as another part of the application. You do not want your application held up unnecessarily because you did not provide all the proper owner authorizations.
- Owner’s personal financial statement. Each owner included on SBA Form 5 will need to provide a personal financial statement. This statement requires owners to fill out personal information regarding their asset holdings (cash, personal property, personal real estate, etc.) and liabilities (accounts payable, mortgage, car note, etc.). Be advised that this form can be time consuming if you have substantial real estate holdings, investments, or complex liabilities.
- Signed IRS form 4506-T (request for transcript of tax return). This form is needed for both the business you are applying for and owners included on the SBA Form 5. It authorizes the SBA to request a transcript of two years of tax returns (2018 and 2017). The individual who is filling out the application on behalf of the business can provide an electronic signature on this form. However, it is important that the individual filling out the application has proper signing authority so this electronic signature is valid. The authorization forms for those owners not filling out the application can be provided via signed PDF.
- Federal income tax return – business. A copy of the most recent business tax return is required for the application. My company provided 2018, as we have not yet prepared 2019. If you do not have a 2018 tax return available, you will need to provide the most recent year that is available and provide an explanation as to why 2018 is not. Keep this in mind if you are a business who has been traditionally less attentive to tax filings.
- Completion of truthful information certification. This is an acknowledgement via e-signature from the individual filling out the application that all information represented is accurate to the best of their knowledge. This form is yet another reason it is important that an individual with proper authority and oversight within your organization is filling out the application. You do not want someone who doesn’t have a full picture of the company or all the relevant information filling out this certification. Keep in mind that you are making legal representations to the federal government. Your company may face consequences and fines related to fraudulent or inaccurate reporting of financial position.
4. What’s next?
I wish I had a good answer for this question. Since I just submitted the application on March 19 after business hours, the only communication I’ve received is an email acknowledgement that my application has been filed. I’ve seen no update to my application status online. There is no indication through the application process as to how much money will be available or on what timeline. Additionally, there is no substantial guidance available as to what criteria need to be met in order to even qualify for this specific type of aid. My fingers are crossed that the SBA will be able to move swiftly, as many companies need money today to keep their doors open. In the meantime, the SBA recommends continual monitoring of your application status online.
