Small Business Support - Covid-19
Information received from a colleague.
THERE ARE 3 KEY RELIEF PROGRAMS designed for small businesses and tenants, where the government will give you money in the form of loans and/or grants. Those loans are: 1) SBA Bridge Loan; 2) Payment Protection Program (PPP Loan); and 3) Economic Injury Disaster Loan (EIDL)
You must learn all you can about PPP Loans and EIDL Loans; what they are, how they work, and how and where to apply. They are critical for your personal well being in the short run.
For the typical small business, sole proprietor, salesman, salon owner, booth renter, massage people, etc., who are not normally eligible for any assistance, the 2 best options are PPP Loans and EIDL Loans.
BTW – and anecdotal to this conversation, you must investigate Unemployment Insurance.
The same group of people just mentioned, who were never eligible for unemployment benefits, now may be eligible for unemployment benefits under the CARES ACT. In fact, because of COVID, if you are eligible through the CARES ACT, unemployment is paying an extra $600 per week in addition to the unemployment insurance payment you receive.
THE PPP LOAN This program provides cash-flow assistance through 100 percent federally guaranteed loans to employers who keep their employees. If employers maintain their payroll, the loans are forgiven.
Small businesses (think about every LLC or similar entity you are involved-in as a separate business) are eligible to apply if they were jacked-up by COVID between February 15th and June 30th. This program is retroactive to February 15, 2020 to help bring workers who may have already been laid-off back onto payrolls. Loans are available through June 30, 2020.
Who is eligible for a PPP loan?
Individuals who operate a sole proprietorship or is an independent contractor or self-employed.
What does a PPP Loan pay for?
It covers payroll, mortgage interest, rent, lease, utilities, interest on other debt
The SBA has 15 days to put this program into effect. It’s not in effect as of today. Give it two weeks.
Where to apply?
At your friendly bank. If you don’t have a friendly bank, get one. My go-to banks are the Bank of the San Juans and Pikes Peak National. But I know most of the local banks in Colorado Springs, and they’re all good and will all help you. The key is think and do local.
EIDL LOAN This is a red-hot ticket. These loans are designed to provide businesses with working capital. Within 3 days of your application, the program is designed to advance $10,000 in emergency funds and if you get the loan it’s added to the loan. If you are turned down, you keep the $10,000.
The trick is you must apply, and you must ask for the advance. (Learn the rules!)
Here is where you apply: href=”https://www.sba.gov/disaster/apply-for-disaster-loan/index.html
Best time to apply for EIDL is in the early morning/late evening when the system is not so overwhelmed.
I’ve been told EIDL loans are up and running but the cash advance program will be a few days. You can still apply through the link provided above and get in the cue.https://www.sba.gov/disaster/apply-for-disaster-loan/index.html
The SBA Bridge Loan is not as important for most people. But they are important if you have an existing SBA loan. It is for those businesses who need short term capital to keep their operations going. You apply for this loan directly with the lender who is holding your current SBA loan.
If you have an existing SBA Loan, you are likely eligible for complete payment deferral for 6 – 12 months. Contact your lender.
If you need help navigating the loan application process, in Colorado Springs or along the Front Range, contact the Pikes Peak Small Business Development Center: www.pikespeaksbdc.org.
Free counseling is offered at the PPSBDC. Don’t pay someone for help. If someone wants to charge you a consulting fee, you’re being scammed.