If you are a small business owner, odds are you've recently heard a lot of news about various programs that are being created to help your business during the COVID-19 crisis.
While it is great to have these resources, cutting through the noise to understand which programs are the right fit for you and learning how to access these benefits can be a challenge. To make things easier for you, Seychelle sat down with our rockstar listing agent and former small business banker, Stephanie Sharpe, to break down the emergency loan program recently introduced for small businesses.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses and nonprofits keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to eligible organizations.
Check out the full interview here:
You can access the links for the latest news and guide for the emergency loan program here:
The basic eligibility requirements for small businesses are as follows:
You are eligible if you are:
- A small business with fewer than 500 employees
- A small business that otherwise meets the SBA’s size standard
- A 501(c)(3) with fewer than 500 employees
- An individual who operates as a sole proprietor
- An individual who operates as an independent contractor
- An individual who is self-employed who regularly carries on any trade or business
- A Tribal business concern that meets the SBA size standard
- A 501(c)(19) Veterans Organization that meets the SBA size standard
In addition, some special rules may make you eligible:
- If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis.
- If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply
Here are a few of our key takeaways from the guide:
- Lenders are looking for businesses in operation prior to February 15, 2020. For independent contractors, be prepared to provide documentation such as payroll tax filings, Forms 1099-MISC, and income and expenses.
- Loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.
- Borrowers are eligible to have their loans forgiven. A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan.
If you have any questions about this small business loan program, or need to talk with a lender, give us a call at 972-608-0777 or request a call HERE.