Small Business Loan Options During COVID-19
Need Some Help?
We know all of you have been affected by the economic situation caused by COVID-19. We want to help you get back on your feet however we can. There are Small Business Administration (SBA) loans available that you can apply for. Yes, it can be confusing, so we want to simplify it for you. Below is all the information you need to apply: documents, how to submit, and links to resources.
While submitting these forms doesn't guarantee you a loan, they do hold your place in line for the limited available funds while it's determined if you qualify.
The government recently announced a few loan options to help small businesses pay their employees, rent, utilities, and more. There are many options to choose from, so you need to understand what works best for you.
We recommend starting with your bank, lender or financial advisor. However, we have included the instructions and applications below for the main loan options the Small Business Administration (SBA) has provided due to COVID-19. The most important thing to know is to not delay. There are limited funds, and these are expected to run out. So the sooner you submit your application and paperwork, the better.
The loans we recommend include the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). One thing to keep in mind is that you can apply for both of these loans. However, the funds must be used for different purposes.
How to Prepare:
Step 1: Gather your paperwork: You will need to prepare your average monthly payroll, rent and utilities, your 2019 tax return, a Profit & Loss Statement (P&L), and your year-to-date financials to begin. You may need more information depending on the loan application.
Step 2: Meet with your bank, lender or financial adviser: You need to know what loan(s) will work best for your specific situation. Most banks will be able to handle SBA loans. Click here to find a list of lenders in your area.
Step 3: Complete the application and submit: You cannot delay getting your application submitted so you don’t risk missing out on these loans.
Paycheck Protection Program (PPP):
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
- Small businesses with 500 or fewer employees, sole proprietorships, independent contractors, and self-employed individuals are eligible
- You can apply as early as April 3, 2020 (April 10th for independent contractors and self-employed individuals).
- Loans are up to two months of your average monthly payroll costs plus an additional 25% of that amount
- Loans can be forgiven
- Apply through any SBA lender
Economic Injury Disaster Loan (EIDL):
Economic Injury Disaster Loans, are low-interest working capital loans designed to help small businesses in disaster-affected areas meet their financial obligations such as payroll, fixed debts, and accounts payable.
- Small businesses with 500 or fewer employees are eligible
- You can apply now
- Loans are up to $2 million with up to $10,000 available as an emergency cash advance
- The cash advance is forgivable if certain conditions are met
- Apply online
Get Help from an Accountant
As an additional resource, the Core Group, a national small business accounting services firm, has made themselves available to assist you with your SBA questions and applications. They are also available to answer your tax questions regarding the CARES Act. You can use the form below to contact them directly.
Or check out the additional resources here: https://coregroupus.com/covid-19.
Frequently Asked Questions
Can I get the disaster loan and the PPP?
Does the PPP loan apply to self-employed business?
Do I have to list all of my companies in the PPP application?
If I cannot front the wages before I pay the mandatory sick leave, is there an exemption for me?
Can you get the PPP loan if you are paying out emergency sick leave?
Does the average monthly payroll for the PPP loan program include taxes paid by the employer.
For the PPP loan program do I have to keep all of my employees to be eligible for forgiveness?
Still Need Some Help?
There's a lot of information to gather, and everyone's situation can be a little different, so we don’t want you to feel overwhelmed. There are resources available for assistance. In addition to the SBA, each state has its own Small Business Development Center (SBDC) that will help you navigate the SBA Disaster Relief loan program.
Connect with the SBDC and enter your zip code to find your closest branch. We surveyed a few of the sites, and in most cases there’s a register, sign up for assistance, register for counselling or some similarly titled button on the home page. But in some cases, that link is deeper on the site and can usually be found fairly easily.
MAIA is committed to helping our martial arts school owners get through this difficult time. If there is anything else you have questions about or need assistance with, you can connect with us at [email protected]. The MAIA team are not subject matter experts for these programs, and things seem to be changing on an almost daily basis. We’ve compiled this information to give you guidelines from where to start. So with that in mind, we highly recommend you consult with your local lending institution, CPA, or other qualified financial experts.
CONNECT WITH A COACH
If you would like to set up a call with one of our MAIA coaches to get advice with other aspects of your business: growing your students, retention, revenue, events, and so much more, we are here to help you. Set up a free 20-minute strategy session to connect with our expert coaches today.