I wasn’t prepared for the shutdown, what are my options as a small business owner?

In just a few short weeks, the novel Coronavirus has changed the way business owners operate. From small restaurants to corporate businesses, companies are learning how to implement remote services options, limited accessibility, and safety measures for employees involved, to help stay afloat during this massive economic shift. Business owners have to consider how to pay their utilities, employees, loans and continue service options for prospect clients. With experiencing limited resources, customer demand, and employees still needing a paycheck;

Many business owners are forced to look into financing options.

 

 

1. Economic Injury Disaster Loan

In response to the COVID-19 national emergency, the Small Business Administration launched the Economic Injury Disaster Loan. Allowing small business owners to apply for funding up to $2 million dollars with an annual percentage rate of 3.75% paid back over a 30-year period. EIDL loans can be used for payroll expenses, fixed debts, accounts payable and other expenses that can’t be paid due to the disaster’s impact. EIDL loans are now available and business owners can access an advance of $10,000 within 3 days of applying. To access the advance, you must apply and request the advance option before submitting. The advance doesn’t need to be repaid. Business can apply for the loan now and can expect their advance within 3-5 days of application date with total funds being received with 3 weeks, if accepted. To apply click at https://covid19relief.sba.gov/#/ .

 

 

2. Payroll Protection Program

On March 27, 2020, President Trump the Coronavirus Aid, Relief, and Economic Security Act (Cares Act) and included relief for small businesses to stay afloat during this time. The Cares Act included a subsection known as the, Payroll Protection Plan (PPP), which allows business owners to pay up to 8 weeks of payroll cost including benefits. Payments can be deferred for the first 6-12 months and can be used for payroll expenses, employee salaries, mortgage interest, rent, utilities and interest on debt incurred before 2.15.2020. You should contact your banker directly to see if you are eligible. Applications are being accepted Friday, April 3, 2020. Click at SBA PPP link here for more information.

The Paycheck Protection Program is live April 3, 2020. Starting April 10, 2020 independent contractors and self-individuals can apply. Apply as quickly as you can as there is a funding cap. This program under the Cares Act provides small business owners with funds to pay payroll cost and benefits over the next 8 weeks. Funds can also be used to pay rent, utilities and interest on mortgage.

Am I eligible to apply for SBA Payroll Protection Program?

Any small business with 500 or fewer employees including non-profits, self-employed individuals, sole proprietorship, independent contractors, veteran organizations, tribal concerns are all eligible. Depending on specific industry businesses with more than 500 employees may be eligible.

Fully Forgiven

Funds may be fully forgiven if at least 75% of the funds are used for payroll cost. This can include payroll expenses, tips, wages, and compensation to independent contractors, interest on mortgages, rent and utilities. Loan payments can be deferred for the first 6-12 months and no collateral or personal guarantees are required. Small businesses, lenders, and government agencies are not allowed to charge any fees you must contact your banker directly.

How Do I Apply?

Download the Application and contact your banking lender directly.

 

 

3. SBA Express Bridge Loans

Express Bridge Loan Pilot Program allows small business to access up to $25,000 quickly. Small business owners who have business relationship with an SBA Express Lender should contact the lender as soon as possible. This loan can help small business to overcome temporary loss of revenue while waiting for Economic Injury Disaster Loan.

There are following terms per SBA web site:

• Up to $25,000
• Fast turnaround
• Will be repaid in full or in part by proceeds from the EIDL loan.

 

 

4. SBA Debt Relief

SBA Debt Relief is another SBA option for small businesses to get help during this Coronavirus Outbreak.

This what stated on SBA web site about the SBA Debt Relief:

“As part of SBA’s debt relief efforts,

• The SBA will automatically pay the principal, interest, and fees of current 7(a) loans for a period of six months.
• The SBA will also automatically pay the principal, interest, and fees of new 7(a) loans issued prior to September 27, 2020.”