SBA Loans During the COVID-19 Pandemic
If you are a small business owner during this time of a COVID-19 global pandemic, you may fear not only for your physical health, but also for the financial health of your business. Many states and local governments are now requiring their residents to shelter-in-place at stay at home except for essential reasons. As a business owner, you are likely seeing catastrophic financial devastation from the inability of your customers to reach either your goods or services. The government just implemented one of the most ambitious financial relief programs the United States’ history has ever seen in order to assist small business owners to survive this tumultuous time. Here are some answers to the questions you may have regarding SBA Loans and the coronavirus pandemic.
How can the CARES Act help my small business?
Part of the CARES Act includes a Paycheck Protection Program (PPP) which is a way for small businesses to obtain a federal loan quickly with less red tape and fewer restrictions than existing Small Business Association (SBA) loan programs.
How do I apply for a loan through this Paycheck Protection Program?
There are now 1,800 approved lenders that will process small business loans throughout the United States. First, you should contact your bank or financial institution to determine if it is an SBA-approved lender. If your bank is not considered an SBA-approved lender, you can directly contact the SBA to find one near you.
When is this funding going to be available?
This new program is developing as this article is being written. Changes are being made on a daily basis. However, the latest information suggested that starting Friday, April 3, 2020, small business loans should begin to be available through the Paycheck Protection Program. Check the SBA’s website to see if this date changes. The hope is that the system will allow for same-day loan evaluations, however, due to the fact that many banks require certain safeguards to prevent fraud, the process may still take a few days.
Will my business qualify?
Your business must meet standards established under the SBA for small businesses and have less than 500 employees, and your company must have been in business at least by February 15, 2020. If you are a food-service business, the 500 employee cap is per physical location.
What is this money to be used for?
These new loans are intended for small business owners to keep their businesses afloat for expenses incurred from February 15, 2020, through June 30, 2020.
How much money can I get?
You are allowed to receive up to $10 million dollars to cover business expenses and payroll. There are certain calculations you will need to perform once you get on the website to determine exactly how much your business qualifies for.
Will I have to pay this loan back?
If you are able to keep your employees on the payroll and continue to pay bills during this crisis, you may have your entire loan forgiven at the end of the loan period. If you do not qualify for this, the maximum loan interest rate will be 4%.
Let Us Help You Today
There are several different loan programs being offered during this unprecedented global pandemic. If you have any questions regarding financial assistance you may be able to receive during this time for your small business, please contact our experienced West Palm Beach bankruptcy attorneys at Kelley, Fulton & Kaplan today at 561-264-6850 for a free consultation. We can help you determine which resources are available for your small business, and what types of financial assistance may benefit you most during this time of financial unrest.