March 30, 2020
SBA Disaster Assistance in Response to the Coronavirus
The U.S. Small Business Administration is offering two main options for assistance for small businesses:
Small businesses can receive both an EIDL and a Paycheck Protection Program loan. However, the loans cannot pay for the same expenses. Businesses are advised to speak to their financial advisor or lender before taking both types of loans.
Paycheck Protection Program
The Paycheck Protection Program provides 100% federally guaranteed loans to small businesses. Approved with the passage of the CARE Act, the SBA will back small-business loans through local lenders. We can expect more details from the Trump administration early this week on the list of lenders who will offer loans under this program. Loans are expected to be available as early as Friday, April 3. Updated information will be provided on this program as details are released.
Most importantly, portions of these loans can be forgiven. For example, if borrowers maintain their payrolls during the coronavirus crisis, restore their payrolls after the crisis; or use the funds for certain purposes in the first 8 weeks of receipt. The U.S. Chamber of Commerce has prepared a comprehensive checklist so businesses and individuals can prepare to file a loan once the program is live. Access it here: https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revise d.pdf
Economic Injury Disaster Loans
The U.S. Small Business Administration is offering designated states low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19. These loans are not new and some businesses may be more familiar with the process, as they are often available in times of catastrophe. Economic Injury Disaster Loans (“EIDL”) are available in states where
the governor has requested an economic injury loan declaration from the SBA. As of March 18, the U.S.
Small Business Administration declared an “Economic Injury Disaster” for the State of Georgia.
SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses and 2.75% for non-profits. These loans offer long-term repayments in order to keep payments affordable, up to a maximum of 30 years.
Borrowers can also receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments, or repaying obligations that cannot be met due to revenue loss. Borrowers can receive the emergency grant even if they do not qualify for additional funds. This emergency grant can be received in as little as 3 days (although tremendous need has overwhelmed the system).
Businesses should expect to provide a tax transcript, financial statements, and a profit and loss statement when applying for this assistance. The SBA estimates the application will take two hours. The COVID-19 Economic Injury Disaster Loan Application can be accessed here: https://covid19relief.sba.gov/#/.
Georgia State Senate District 17 encompasses parts of Newton, Henry, and Rockdale counties with nearly 150,000 registered voters. Brian Strickland entered his second full term in the Georgia Senate in 2020. Brian, his wife Lindsay, and their two children reside in McDonough, GA. Through Brian’s leadership position at the capitol where he fights for District 17, and all of Georgia, he has impacted Georgia for the better through various executed actions. Not only did Brian support the First Responder bill which aids police, firefighter, and EMS personnel but he was a key player in the passing of the Georgia Criminal Justice reform bills and Georgia Surprise Medical bills. Above and beyond that, Brian labored to bring funding to Southern Crescent Technical College making it one of the top technical schools in Georgia and is constantly raising the bar in the fight against human trafficking.