03 Apr Coronavirus Small Business Loan Program: A Breakdown
Many things have changed due to the COVID-19 pandemic. It has shut down countless businesses across the country. However, the government passed a bill that would provide relief to small businesses affected by this disaster. As of April 3, applications for the Coronavirus Small Business Loan Program are being accepted.
Here is a breakdown of what you need to know and how to apply.
Who Qualifies for the Program?
The SBA defines a small business as any “business, including non-profits, veterans organizations, tribal concerns, sole proprietorships, self-employed individuals, and independent contractors with 500 or fewer employees.” This covers a massive chunk of businesses in the country. With this definition, local restaurants, car dealerships, and more are all eligible for the program.
If you find that you’re eligible and want to start your application, read more at the SBA website.
How Does the Program Work?
The program is fairly simple. When you receive the money, it’s technically a loan. However, the loan can be forgiven if it is used for business-related costs ONLY. This includes payroll, rent, mortgages, and utilities for your place(s) of business. To guarantee forgiveness, though, the SBA recommends that 75% of the loan be used for payroll.
The loan is designed for you to pay your employees for eight weeks. After that point, if you still need money, then you’ll have to pay it back. Thankfully, the loan has 1% interest, no fees, and a six-month deferral period. Furthermore, if you use the money for anything other than the aforementioned expenses, then you must pay it back.
We highly recommend that any eligible businesses in need would apply for the program. Contact your local bank for details on how to apply.
The SBA is taking multiple steps to keep small businesses afloat. If you want to know more about their programs, check out their website (link above). Additionally, if you have questions about the Coronavirus Small Business Loan Program, give us a call at 614-524-4888.