Accessing COVID-19 Stimulus support
CARES is a $2 Trillion economic stimulus package that is broken up into several different programs to help both individuals and businesses through the economic crisis caused by COVID-19. The following 3 programs are most applicable to small businesses:
Payroll Protection Program (PPP): This link to the Payroll Protection brochure is a fantastic layout of this program. This loan facility is in summary 2.5x monthly payroll (typically gathered from 2019 payrolls). It is a 1% annual interest rate and repayment does not start until 6 months after loan inception. This loan is also capable of being forgiven to the extent the money is used for payroll, rent, and utilities. There are details that apply to all of the above and many of those are in the attached brochure. This loan is obtained through your local bank’s SBA platform. You must go to your bank and work through them to get this loan. The loan application process is fairly simple compared to most loans. You will find it very difficult to get anywhere if your bank is not facilitating this loan as banks are inundated with applications and they are taking care of their customers first. There is provision to apply for this loan if you are self-employed, but you will need to talk to your bank on how to navigate such.
Economic Injury Disaster Loan (EIDL): Here is a link to the brochure which does an excellent job of going over this loan. These loans have been around a while and are used for businesses impacted by disasters (ie Tornadoes & Hurricanes). The SBA has opened this program up to all businesses impacted by COVID-19. This is a long term working capital loan that is not forgiven. For businesses, it is a 3.75% interest rate on up to a 30 yr loan term. You apply for this loan online direct with the government at sba.gov/disaster. It is a very simple application. They will let you know how much loan you qualify for up to $2 million.
Employee Retention Tax Credit: This is a brand new tax credit that applies to businesses (via their payroll tax) that have been hit really hard and are experiencing a more than 50% drop in revenue due to COVID-19. There is not an application that I know of yet for it. Please follow this link for more information. This is something that you should be aware of and keep an eye out for updates on it.
Written By: Dustin Parker
Today’s BPI Advice: Our advice is to create as much capacity and options for capital as you can. You do not have to accept the loan; therefore applying for it is strongly advised.
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