Fill Out Your Sba 1368 Form

Completing the SBA Form 1368 correctly is crucial for securing an Economic Injury Disaster Loan (EIDL) or Military Reservist Economic Injury Disaster Loan (MREIDL). However, many applicants make critical errors during this process. One common mistake is failing to provide accurate monthly sales figures. It’s essential to report all sales for the three years preceding the disaster accurately. Estimates can be used, but these must be clearly labeled with an “e.” Otherwise, discrepancies can raise questions regarding the legitimacy of the application.

Another frequent error involves improperly reconciling the total sales figures with the applicant’s tax returns. This reconciliation is not just a formality; it serves as a critical verification step for the SBA. If the totals do not match, it can lead to delays or denials. It’s advisable to double-check these calculations to avoid this pitfall.

Many applicants overlook the need to clearly identify the economic injury caused by the disaster. The SBA requires proof that the claimed injury is substantial and directly tied to the declared disaster or military call-up. Providing insufficient or vague explanations can lead to rejection of the application. Clear and detailed narratives should complement the numerical data.

An optional but beneficial mistake to avoid is neglecting financial forecasts. While not required, a financial forecast can significantly strengthen the application. This document outlines projected income and expenses, providing the SBA with a clearer picture of the business’s financial outlook during the recovery period. Many overlook its importance, missing an opportunity to showcase the potential for recovery.

Furthermore, not including additional financial information is a missed opportunity. Applicants often fail to submit extra narratives or documentation that could elucidate the economic loss. These supporting documents offer context for the numbers and can be pivotal in establishing the overall impact of the disaster.

Inaccurate labeling of estimates affects the application's credibility. Using "estimated figures" without proper notation could lead the SBA to question the integrity of the submission. Clearly labeling estimates, however, provides transparency that fosters trust.

Lastly, an all-too-common error is submitting the form without a thorough review. Neglecting to proofread can result in typos or inconsistent figures, which can create confusion. Taking the time to review the entire form before submission helps ensure clarity and accuracy, boosting the chances of approval.

The SBA Form 1368 is a crucial component of the application process for Economic Injury Disaster Loans (EIDL) and Military Reservist Economic Injury Disaster Loans (MREIDL). To navigate the application process successfully, applicants often need to submit additional forms and documents. Below is a list of commonly used forms that can complement the SBA Form 1368.

• SBA Form 5: This is the Disaster Business Loan Application. It collects basic information about the business and the owner, including the nature of the business, location, and details about the disaster impact.
• SBA Form 7: This form is for the Borrower Information Form. It requires detailed personal information about the business owner, including background, management experience, and ownership structure.
• SBA Form 980: The Monthly Sales Figures Form helps applicants report their monthly sales over a specified period. This information is essential for demonstrating economic injury due to the disaster.
• SBA Form 470: This is the Financial Forecast form. While optional, it allows businesses to project income and expenses, helping the SBA understand the anticipated financial impact of the disaster.
• SBA Form 1210: This is the Consolidated Business Plan. It provides detailed insights into the business operations and future plans, serving as a companion to other forms to establish a comprehensive understanding of the business's situation.
• Tax Returns: Recent tax returns, often required for further verification of business income and expenses. They help the SBA confirm the financial history of the business and assess eligibility.
• Bank Statements: Current bank statements may be necessary to prove cash flows and support claims of economic injury. They can illustrate the financial state of the business before and after the disaster.
• Insurance Claims: If applicable, documentation related to insurance claims can bolster the application by demonstrating the financial recovery efforts already undertaken.
• Business Licenses: Copies of relevant business licenses and registrations provide proof of business legitimacy and operational status during the period of economic injury.
• Employee Payroll Records: This information outlines employee compensation and the impact the disaster has had on workforce stability, which can affect loan eligibility.

Submitting these additional forms and documents along with the SBA Form 1368 can significantly strengthen an application for loans intended to help businesses recover from economic injuries. Providing a complete package of information allows for more effective review and increases the chances of obtaining the necessary support to rebuild and succeed.

• SBA Form 5: This form is the disaster business loan application. It asks for basic information about the business and its ownership, similar to how the SBA 1368 requires details to support a loan request.
• SBA Form 227: This document assists businesses in providing their financial summaries and forecasts. Like the 1368, it emphasizes the need for financial documentation to substantiate claims of economic injury.
• IRS Form 4506-T: This form allows applicants to request a transcript of their tax returns. Similar to the SBA 1368, it reinforces the importance of accurate financial records when seeking disaster aid.
• SBA Form 3301: Used for loan servicing, this form gathers updated financials for existing borrowers. Its focus on financial health is akin to the 1368's request for monthly sales figures.
• SBA Form 1244: This application is for the small business investment company program but shares the need for detailed financial statements, highlighting business viability, just as the 1368 does.
• SBA 700 & 710: These forms are for the 7(a) loan program, requesting business financial information. They ensure the lender has sufficient background to assess loan eligibility, echoing the requirements in the SBA 1368.
• OCC (Office of the Comptroller of the Currency) Forms: These forms collect operational and financial information for banks. They resemble the SBA 1368 in their mission to illuminate financial stability during crises.
• State Disaster Loan Applications: Various states have their own disaster relief forms. While tailored to specific state needs, they parallel the SBA 1368 in their goal to gather financial data and assess economic injury.

When filling out the SBA Form 1368, it's important to approach the process with care. Here are some helpful tips on what to do and what to avoid:

• Do: Provide accurate, detailed monthly sales figures for the past three years. Be as specific as possible.
• Do: Mark any estimated figures clearly with a small letter “e” after the number to avoid confusion.
• Do: Include any additional narrative or financial information that could support your claim of economic loss.
• Do: Consider creating a financial forecast to show potential income and expenses during the affected period, although it's optional.

• Don't: Submit figures that do not reconcile with your tax returns; this can raise red flags and delay approval.
• Don't: Leave out any required information, as incomplete applications can lead to rejection.
• Don't: Ignore the importance of clarity. Make sure to write legibly and keep your information organized.
• Don't: Send forms directly to the Office of Management and Budget as it may result in processing delays.

Many people have misunderstandings about the SBA Form 1368. Below are some common misconceptions and clarifications to help clear up any confusion.

• Misconception 1: Only large businesses can apply for the SBA Form 1368.

In reality, the form is intended for small businesses and small agricultural cooperatives. Anyone can apply as long as they meet the size standards set by the SBA.

• Misconception 2: The form is only for businesses that have been directly impacted by a disaster.

This is not entirely true. While an applicant must demonstrate economic injury due to a declared disaster, it can also apply if a business is impacted indirectly.

• Misconception 3: The SBA Form 1368 must be filled out with exact figures.

Applicants can estimate monthly sales figures if actual numbers are unavailable. Just remember to label these estimates clearly.

• Misconception 4: Submitting the SBA Form 1368 means automatic approval for a loan.

This is misleading. Completing the form is just one step in the application process, and approval depends on multiple factors including eligibility and substantiation of economic loss.

• Misconception 5: A financial forecast is mandatory when submitting the form.

While a forecast can be helpful in illustrating financial impact, it is not a requirement. Providing more information is at the applicant's discretion.

• Misconception 6: Only businesses with large losses can benefit from this form.

Even smaller losses can be considered substantial if they affect a business's ability to meet its obligations and continue operations.

• Misconception 7: Once the form is submitted, no further documentation is needed.

Applicants may need to provide additional documentation or narrative if supporting documents are not included initially. Keep communication lines open with the SBA.

Filling out the SBA Form 1368 can be crucial for small businesses seeking financial assistance through Economic Injury Disaster Loans (EIDL) and Military Reservist Economic Injury Disaster Loans (MREIDL). Here are six key takeaways to keep in mind:

• The form is essential for requesting an economic injury loan increase when supporting documentation is unavailable.
• Applicants must demonstrate that their economic injury is significant and directly linked to a declared disaster or the call-up of an essential employee for MREIDL.
• Monthly sales figures for three years before the disaster must be provided, along with the most recent month's data. Estimations are acceptable if actual figures are missing.
• Total figures submitted on the form should align with the sales figures reported on tax returns for the respective fiscal years.
• Although not mandatory, submitting a financial forecast illustrating expected income and expenses during the affected period can strengthen your application.
• Clarifying any estimates in your figures with an “e” is essential for transparency and accuracy.

Completing the SBA Form 1368 diligently and accurately can improve the chances of receiving the funding needed to navigate economic hardships.