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SBA offers loan options


By Christy Porter
Managing Editor

America’s small businesses are facing economic hardships as a result of the COVID-19 outbreak. The President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in late March to bring relief to workers and small business.
There are several options currently being offered by the Small Business Administration to help businesses keep their workforce employed, as well as to help with financial obligations that continue in spite of the economic disruption. Application may be made for multiple loans, however these loans work in conjunction with each other and may be repaid in full or in part by proceeds from another SBA loan.
The Paycheck Protection Program (PPP) appears to be the most prevalent plan currently being discussed. This loan provides small businesses a direct incentive to keep their workforce employed and on payroll during the COVID-19 crisis. Faith-based organizations, some non-profits, veterans’ organizations, self-employed individuals and independent contractors are also included in the availability. The loan, or a portion of it, may be forgiven if employees are kept on payroll for up to eight weeks and loan money is used for payroll, rent, mortgage interest or utilities. It has a comparatively reasonable maturity timeline and a nominal interest rate. The application is submitted through a participating approved lender, such as your local bank, credit union or the Farm Credit system. Processing began April 3 and will be available through June 30, 2020. Loan forgiveness is possible in varying amounts, as is payment deferment, and there are no collateral requirements or fees. There is small business criteria that must be met, so it’s best to consult with your local lending institution for specific details.
Also in response to the COVID-19 pandemic, there is disaster assistance available with the Economic Injury Disaster Loan Emergency Advance (EIDL). This loan advance provides up to $10,000 of economic relief to businesses that are experiencing difficulties due to temporary loss of revenue. According to the SBA website, this loan advance, if given, will not have to be repaid (forgivable funds). Again, certain criteria must be met and this loan may be applied for online at https://covid19relief.sba.gov/#/ or you may call (800) 659-2955 or email disastercustomerservice@sba.gov. The deadline to apply is Dec. 21, 2020.
“A decision for the appropriate SBA program and loan amount will be based on your actual business expenses evidenced by payroll and other obligations. A business may qualify for one or more of the SBA programs. While a business may apply for both PPP and the EIDL loans, and may be approved for both, keep in mind the programs are designed to work together and the total loan amount for both programs will be considered by the SBA when approving requests for each business,” says Rawly Gorman, Town & Country Bank Vice President/Branch Manager. “Information on these programs are updating constantly and loan demand is high; it is important that you take advantage of the opportunity to access the limited funds in a timely manner.”
For small businesses that have a current business relationship with a SBA Express Lender, a SBA Express Bridge Loan may be an option to access up to $25,000 quickly. This loan may be applied for as a term loan or to bridge the gap while making application for an EIDL loan. In this situation, the small business may also qualify for a SBA Express Disaster Bridge Loan. The bridge loans will be repaid in full or in part by proceeds from the EIDL loan, according to the SBA website.
The SBA is also providing a financial reprieve to small businesses with current loans during the COVID-19 pandemic. Various loans may receive automatic payment or payment deferments. If you have questions about your current loan, contact your Loan Servicing Office directly. The SBA provides a number of loan resources for small businesses to utilize when operating their business. For more information visit https://www.sba.gov/funding-programs/loans.
About the SBA
Since 1953, the SBA has worked to ignite change and spark action so small businesses can confidently start, grow, expand, or recover. The U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream. The SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses. https://www.sba.gov.

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