We have heard from a few owners who have an EIDL that they have received notices from an SBA case manager requesting them to submit a Resolution of Board of Directors and Hazard (business liability insurance) to the SBA.
The EIDL documents require a Board Resolution to be submitted within 6 months of loan disbursement. Proof of Hazard insurance is due within 1 year of loan disbursement.
This is the wording directly from the SBA EIDL documents:
Borrower shall, within 180 days of receiving any disbursement of this Loan, submit the appropriate SBA Certificate and/or Resolution to the U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.
Within 12 months from the date of this Loan Authorization and Agreement the Borrower will provide proof of an active and in effect hazard insurance policy including fire, lightning, and extended coverage on all items used to secure this loan to at least 80% of the insurable value. Borrower will not cancel such coverage and will maintain such coverage throughout the entire term of this Loan. BORROWER MAY NOT BE ELIGIBLE FOR EITHER ANY FUTURE DISASTER ASSISTANCE OR SBA FINANCIAL ASSISTANCE IF THIS
INSURANCE IS NOT MAINTAINED AS STIPULATED HEREIN THROUGHOUT THE ENTIRE
TERM OF THIS LOAN. Please submit proof of insurance to: U.S. Small Business Administration, Office of Disaster Assistance, 14925 Kingsport Rd, Fort Worth, TX. 76155.
Below are more specifics from the SBA on how to satisfy each of these requirements. I have also attached a Resolution of Board of Directors document provided by the SBA. You should consult your own attorney and insurance agent to make sure that you meet these requirements.
Per your Small Business Administration Loan Authorization & Agreement Documents for your EIDL loan, please provide the following documents:
Resolution of Board of Directors/Certificate of LLC/LLP, a document generated by your company, which must indicate:
Name of Business and loan application number.
Specific date the members of the company met to discuss the EIDL.
Statement that the members agree to accept the EIDL in the amount indicated on the loan documents.
Individual who signed the loan closing documents is designated to be signatory of the loan documents.
Signed by managing members of your business.
The Certificate of Business document is due within 6 months of your loan disbursement date. Evidence of Hazard Insurance (NOT Homeowners or Liability Insurance), which must include:
Business Name or Name of the Applicant as indicated on the loan application.
Business Address as indicated on the loan application.
Policy dates.
Covers collateral of 80% of the insurable value of the business content (not including land or buildings). For details of business items identified as collateral, please refer to your Loan Authorization & Agreement Documents.
Note: The SBA does NOT need to be listed as a Loss Payee.
A copy of the declaration page, provided it lists the above, is sufficient documentation. The Hazard Insurance document is due within 1 year of your loan disbursement date.
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