The MSBDFA* Program-COVID-19 Emergency Relief Loan Fund FAQs

• Have been in business prior to January 1, 2019.
• Have 51% of its ownership with personal credit score(s) of at least 550.
• Have its principal place of business must be in Maryland.
• Be in good standing with the state of incorporation and qualified to do business in Maryland, if not a Maryland corporation.
• Demonstrate financial stress or disrupted operations that were due to the COVID-19 pandemic crisis.

• Non-profits organizations
• Financial and Insurance institutions
• Gambling operations
• Real estate investment companies
• Real estate development companies
• Massage parlors
• Cannabis related businesses
• Businesses that have previously received a COVID-19 loan from the State of Maryland

It is difficult to provide a specific timeline. There are many factors that can shorten or length the approval process. The applications will be processed on a first come, first served basis. Some of those factors are the number of applications received, the number of applications ahead of you, whether your application is complete, etc. We will process the complete applications as quickly as we can.  Your patience will be appreciated.  Incomplete applications will be declined and when complete can be resubmitted (a new submittal date would be applied).

Once a complete application is received, MMG will underwrite the loan request, contact you to clarify any questions it may have, determine if it can recommend the loan for approval, if so, present the loan to the MSBDFA loan committee, and you will be notified of the results.

It is the objective to have approved loans closed within 2 weeks. Loans of $100,000 or more may take a longer time to settle due to the need for more documentation.

Federal tax returns can be used instead for either or both years. Bank statements, credit card statements, income logs, expense logs, etc. are not acceptable as replacements for 2018 or 2019 Financial Statements or Federal Income Tax Returns.

The 5/31/20 interim financial statement or one more recent will be the best determinate of the effects of COVID-19 on your business and expediate the underwriting of the application. If you do not have an interim financial statement you will need to provide at least one or more of the following for the purpose of evaluating the effects of COVID-19 on your business:

• Evidence that reflects the inability to pay rent, make loan payments, pay suppliers, pay employees due to reduced revenue or suspended operations.
• Evidence of increased costs related to COVID-19 prevention measures.
• Evidence of disrupted supply network leading to shortage of critical inventory/materials.
• Other evidence of business disruption due to COVID-19 subject to review on a case by case basis.

Any and all of these alternatives to the 5/31/20 or more recent interim financial statements will result in the underwriting process taking longer to complete.

Yes, you can make principal payments on the loan in the first 12 months, but there is not requirement to do so.

For loans of $50,000 or less, a personal guaranty is not required.  For loans above $50,000, a personal guaranty is required.

No, the loan can be paid in full at any time during the term of the loan.

No collateral is required for loans that are $100,000 or less.  Loans of $100,000 or more will be required to provide a Uniform Commercial Code (UCC) lien on all of the borrower’s business assets.

No. The loan term can effectively be shorter by paying off the loan with no penalty at any time prior to maturity.

The funds can be used to pay payroll expenses, rent/mortgage payments, utility expenses, or other expenses that occur in the ordinary course of operating the business.  The funds can also be used for the acquisition of equipment, vehicle, or facility improvements to adjust to the need to “change the way you do business” during and after the pandemic crisis.

The funds cannot be used to pay off an existing loan or for any personal expenses.

The interest rate will be 0% for the first 12 months and 2% for the remaining term of the loan.

No.

If your business received a COVID-19 loan from the State of Maryland, your business is not eligible to apply for a MSBDFA COVID-19 loan.  If your business received a COVID-19 grant from the State of Maryland, your business is eligible to apply for a MSBDFA COVID-19 loan.

Yes, the business can apply but before it does so, it should verify that the any loans it does have, including COVID-19 loans, does not prohibit the business from obtaining additional loans.

If your business receives a MSBDFA COVID-19 loan or if it does not; your business is still able to apply for MSBDFA’s other financing programs.

Yes, applications for MSBDFA’s other financing programs will continue to be accepted.