Helping Small Business

Small Business Loan and FREE $10,000

p.s. I am not an accountant or an attorney. Just passing on info I received from my accountant.

With the passage of the CARES act on Friday afternoon, there is finally some relief for small business owners. While the bill is 1,000+ pages there are two key provisions that we want to make sure you are aware as soon as possible. They are both SBA related and should help most small business owners.

The SBA is offering an Economic Injury Disaster Loan (EIDL). This is a $10K loan advance that will not have to be repaid as long as it is used for economic relief due to COVID-19. The SBA has streamlined the application process so it can all be done online and only takes about ten minutes.Online Application - https://covid19relief.sba.gov/#/

Many have already submitted the paper application. If this is your case and you didn’t go through the link above we recommend you re-apply through the above link as it was set up specifically for COVID-19. In addition to the $10,000 up front, you can apply for up to $2M in additional funding.

The rate of these loans will not exceed 4% and can be spread over 30 years. Currently, the only portion of this loan that will be waived or forgiven is the initial $10,000.

The second loan offering is called the Payroll Protection Program (PPP) and have a component of the loan that can be forgiven. Congress has allocated $349 billion to this loan offering. These loans are considered SBA 7(a) loans and are applied for directly through your bank or credit union.

Here is a brief synopsis of this loan program.Businesses that can apply:

Any business with 500 or fewer employees.The business does not have to be shut down completely or partially. Any business that applies is presumed to need the loan and will get it. The only underwriting standards are the company was in business on February 15, 2020 and had employees for whom it paid salaries and payroll taxes.These loans are non-recourse, meaning no personal guarantees or liens on business assets.

The maximum loan you can receive will equal 2.5 times your average “payroll costs” during the 1-year period before the loan is taken. The portion of the loan that can be forgiven is equal to the sum of the employer’s: (A) Payroll costs(B) Interest (not principal) on any business debts that were incurred prior to February 15, 2020(C) Rent(D) Utilities, including electricity, gas, water, transportation, telephone and internet access . . .

Which are incurred during the 8 week period that begins on the origination date of the 7(a) loan. Attached to this email you will find a more detailed synopsis of the PPP loans. Right now we are working on putting together a list of SBA 7(a) loan providers, but we do recommend contacting your current bank or credit union to see if they can assist. As the bill is currently written you should be able to apply for both loans without one affecting the other. -