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Politicking

Small Business Fundings

. 4 min read
Small Business Fundings


Dylan Schultz

During this time of uncertainty, we want to provide you all with the essential tools to stay afloat and see it through to the other side. From retail to the service / hospitality industry, there is something that can be done to help you, yours and the community around you.

In this article, we share our expertise and tips on how to navigate your business through these uncharted times. We will lay out the government institutions that are currently in place and how to efficiently navigate through the process of enrollment. These programs and information are all publicly available. Please do further research if you plan to take advantage of any of these government programs.

If you are operating an essential business during this time we want to thank you for all that you do. I'm sure many of you did not expect to be on the frontlines of this pandemic - but we cannot thank you enough for stepping up during this time.

First and foremost, it is important to continue to follow the CDC guidelines, in an effort to maintain a safe workplace environment for employees and customers.

Your first mission is to identify and prioritize key concerns to your business. Is it making rent? paying employees, or keeping your supply chain moving in order to maintain inventory? Hopefully this information can ease some of this stress.

There are many ways you can utilize government loans and assistance during this time. While there are arguably many problems involving these offerings, we’re here to provide you with a quick run down on key information so you have the best chance at receiving financial relief for your company.

As I'm sure you are aware, the government has released a large amount of funding to support small businesses that have been affected by COVID-19. Your first stop and main source of information should always be SBA.Gov (U.S. Small Business Administration). This will provide you with all the information necessary to find out if and what government loans your business qualifies for now.

Please note, this assistance should be used in an effort to keep employees on the payroll, make rent, and pay vendors. While we understand there is much fear in the unknown, we ask that you refrain from using these loans for personal gain at this time.

SBA defines a U.S. small business concern as:

  • Organized for profit
  • Has a place of business in the U.S
  • Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor
  • Is independently owned and operated
  • Is not dominant in its field on a national basis

Economic Injury Disaster Loan (EIDL)

What is it:

  • A $10,000 forgivable loan based on covid 19 damages
  • Maximum loan is $2 million with the exact amount based on economic injury suffered.

How:

  • Fill out the SBA EIDL application here
  • The normal EIDL application has been streamlined due to covid 19 and should take about 2 hours.
  • SBA states your 10,000 loan should arrive in 3 days

SBA Paycheck Protection Program (PPP)

What is it:

  • PPP loans are available for the lesser of $10 million or 2.5 times your average monthly payroll.
  • 100% of your loan could be forgiven if you follow guidelines.

How

  • Check eligibility before you apply.
  • Apply through any SBA approved 7(a) lender.
  • Here is a list of 100 active SBA approved 7(a) lenders
  • You find a eligible 7(a) a lender here

Other important facts:

  • You can apply for both a PPP and an EIDL.

SBA Express Bridge Loans

What is it:

  • This is for small businesses with a current relationship to any SBA approved lenders to receive a quick loan of up to $25,000. This is meant to relieve some of the immediate pressure caused by the Covid-19 crisis.
  • This loan will have to be repaid in full unless you have also applied for the EIDL. In which case this loan will be taken from the relief provided from the EIDL.


SBA Debt Relief

What is it:

  • The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
  • The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.

( This is only possible for businesses with loans already in place or as stated issued before September 27, 2020).

Important:

  1. File for the appropriate assistance as soon as possible
  2. Follow the SBA guidelines and make sure you are keeping track of what your assistance is being used for.

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options

Please note that these relief programs are far from perfect. Many small businesses have been having a hard time receiving funds or even getting in contact with the SBA. There have also been reports of money being unfairly distributed to Start Up companies with large amounts of funding or even the companies as large as the LA Lakers. I know that things can be unfair but we urge you to keep trying and fighting. In the United States we live in a service based economy and it is very important that small businesses have a strong return. Good luck everybody! We hope this helps.



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