There is a lot of information that is coming out from the government, and we are doing our best to keep up with it. Here is what we know as of now. There are several loan/grant programs available:
- Local small business grants
- Payroll Protection Program (PPP)
- Economic Injury Disaster Loans (EIDL)
We are focusing on the federal options because they are the most widely available. Please feel free to let us know if you want assistance looking into a state or local loan or grant program.
Payroll Protection Program – This is not a need-based program. Any business that has payroll, files a Schedule C, or files as an S Corp is included.
You don’t need employees or to be on payroll yourself for this to be relevant. This is an SBA loan that will be forgiven if you use the money to pay one of the qualifying expenses (payroll, mortgage/rent, utilities, healthcare).
This program is going to be administered through 7(a) approved banks, which is why we asked you to reach out to your bank yesterday and get on their increasingly long list. If you haven’t done so yet, do it now! The SBA has not distributed the administration’s guidelines to the banks yet, so everyone is in a holding pattern until they do. The Secretary of the Treasury has said that the process will be open by Friday, but banks are skeptical.
Some people have mentioned to me that their business is fine, so they aren’t going to apply. If you don’t need the money, then absolutely don’t worry about it. However, I would encourage you to think of the future as well as present need. This is financial assistance that will help keep your business stable through a recession of undetermined length. The program ends 6/30/2020 and will quite likely run out of money before then.
Economic Injury Disaster Loans. These are disaster loans from a program the SBA already has in place when a state declares an emergency. You can ask to be considered for a grant of up to $10k during the application process. However, that grant will count against any loan forgiveness you receive from the PPP, so it won’t hurt to apply in both places—and it won’t net you additional funds.
We will continue to keep you updated. If you would like to schedule a call with us to discuss your specific situation, please let me know.