Pandemic Resource Update 4-3-20
Today’s updates below…
SBA EIDL Loans/Grants
EIDL Explainer video
The video that I sent out yesterday from SW SBDC was changed so there's a new link: https://www.youtube.com/watch?v=TiX_kaTs1xA&feature=youtu.be
Loan vs Grant
To clarify, the preliminary loan and grant application are the same thing. If you apply, you apply for both as long as you check the box stating “I would like to be considered for an advance up to $10,000”.
EIDL Advance clarification from the SBA:
“If you asked for the EIDL advance of up to $10,000 that is supposed to be received within 3 days of submission.* We just recently found out how they determine the amount of the advance. That formula is based on $1,000 per employee up to the maximum of $10,000. That advance is then forgiven whether you receive/decline or are denied the loan.”
Loan Amount
You don't ask for a specific loan amount. The SBA will review your application (and may ask for more information) and will decide how much to offer you. Loan amounts can be up to $2 million, but most businesses will be offered much lower amounts. The intention of the loan is to help you pay ordinary business expenses (rent, mortgage, utilities, monthly loan payments) it is not intended to refinance current loans or to help with business expansion.
If you receive a loan offer, you do not need to accept the loan. We are encouraging everyone to apply for this loan. If you later determine you don't need the money or you get a better offer with another program, you can decline the loan without penalty.
Timeline/Response Time
The CARES Act legislation says that the Advance will be deposited within 3 days of submission of your application, however we have yet to hear of any applicants/businesses who have received this.
Once your application is submitted the SBA’s Disaster Office in Ft. Worth TX should then be contacting you for further information if it is needed. You should be receiving an email from them also confirming the receipt of the application. The EIDL loan can take up to 2-3 weeks before a decision is made.
CARES Act Paycheck Protection Program (PPP) Loans
These loans will provide cash-flow assistance through 100% federally guaranteed loans to small businesses and select employers who maintain their payroll during the Covid19 emergency. These funds will be administered by eligible SBA lenders. Please reference the attached Chamber of Commerce document for a straight-forward overview of the program and the attached Senate FAQ document for a more detailed program overview.
Note: Though today (Friday April 3) has been publicized as the anticipated start date, this might be delayed as eligible lenders are continuing to receive ongoing guidance from the SBA. Specifics of the program are still being worked out with the SBA, including detail on how the application process will work. Feel free to reach out to an eligible lender for more info and/or to let them know you intend to apply, but realize a lot is still being fleshed out.
Here’s the gist of correspondence we've received from a bank contacts:
Financial institutions still do not have direction from the SBA as to what documents will be required. The application has been changing regularly. Nothing is finalized yet. I can tell you what we are asking for in advance but we are assuming this is what will be needed by SBA. Again, nothing is finalized and things are changing by the minute.
Also, given that funds are limited and expected to go fast, it is not guaranteed that all businesses that apply will receive funding. However, in an effort to help you start to think about which documents may be helpful to have on hand, please consider the following:
Current organizational documents – articles of incorporation, etc.
Payroll Information, with breakdown of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.)
Most recent profit and loss statement or financial statements
Most recent Mortgage Statement or Rent Statement (Lease)
Most recent Utility Bills (Electric, Gas, Telephone, Internet, Water, etc.)
Recent Tax Returns
We suggest researching to determine participating banks - especially if you already bank or have credit cards with them.
EIDL & PPP?
You CAN apply for the paycheck protection plan if you already applied for the EIDL. There is some confusion as to whether or not you can accept both. At first we heard no; then we heard maybe.
Facebook Business Grants
I previously sent out information about Facebook Grants. However it does not look like businesses in this area are eligible for Facebook's small business grants because we don't have a Facebook office here: https://www.facebook.com/business/grants