SBA disaster relief loans, PPP and other funding opportunities

SBA Loans PPP CARES

Has your business has been adversely impacted by the coronavirus pandemic?

Consider taking advantage of these U.S Small Business Administration resources.

PAYCHECK PROTECTION PROGRAM (PPP)

Small businesses may be eligible for loans in an amount up to 250% of their average monthly payroll, with a maximum loan amount of $10 million. These loans may be forgiven (e.g., not repaid) if borrowers maintain their payrolls during or restore them after the crisis. Funds can be used for payroll costs, including salary, wages, payment of cash tips, employee group health care benefits, retirement contributions and covered leave. Funds can also be used to pay interest payments on mortgage obligations, rent, utilities, and interest on other debt obligations.

Applications open Friday, April 3. Apply early to maximize your chance of getting a loan. For More Information and how to apply

ECONOMIC INJURY DISASTER LOANS & GRANTS

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000 and working capital loans of up to $2 million. These loans and grants are designed to help small businesses overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.

Small businesses that have non-disaster loans from the SBA, such as 7(a), 504 and microloans, may be eligible for debt relief. The SBA will cover all loan payments for six months, including principal, interest and fees. This is also available to borrowers who take out new loans within the next six months.

Contact your current lender to request a deferment of payments. For More Information and how to apply

SBA encouraging all business to apply.

Quick points: 

  • All business in in NC are eligible for SBA Disaster Assistance; for-profit and non-profit.
  • SBA is being very lenient with credit review at this time.
  • You don’t need to be declined by a bank first to apply for one of the SBA disaster loans – for all intents and purposes, SBA is trying to waive the “credit elsewhere” test.
  • Do need to have physical presence within the State – not a P.O. Box.
  • SBA loans – amounts as little a few thousand dollars up to $2,000,000.
  • The SBA loans are unsecured up to $25k; above $25k loans are secured by business and/or personal; however, if a business either does not have collateral or has already granted liens over the collateral in support of other loans, then this will not necessarily serve to disqualify an application.
  • Purpose of these loans is to pay payroll, accounts payable, etc., replacing cash flow that is lost because of COVID-19.
  • Interest rate is 3.75% for 30 years (for profit); 2.75% for non-profits; can prepay without a penalty.
  • Sba.gov/disaster to apply
  • 8 to 21-day processing timeline (more complex the business the longer time period), plus a 5-day period to distribute cash.
  • You can refuse the money even if you apply and get approved for loan; alternatively,  you can apply now, get initial disbursement, and then apply later, too.
  • Loan repayment doesn’t begin until the disaster is over; disaster declaration was retroactive to January 31, so you can lookback timing-wise for business losses.
  • Cash-flow is really what SBA is lending on; you’re looking at paying fixed debt, accounts payable, payroll – these loans are not used for business expansion or refinance of existing debt.
  • SBA urges folks to get started sooner than later in terms of putting together financial statements, forms, necessary documents, etc.

For the full article and more information click here.

 

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