The COVID-19 Pandemic doesn’t mean you need to go out of business
Through the Small Business Administration, your business can weather this storm
What is the Payroll Protection Program?
The Payroll Protection Program (PPP) is a series of loans the Small Business Administration (SBA) of the U.S. Government is offering to small businesses. The program is designed to ensure businesses can still pay their employees, even if they are forced to temporarily close under quarantine procedures. The PPP provides funding to businesses that covers payroll. It is federally guaranteed, meaning that, if you take out a PPP loan, you will be able to pay your employees until at least June 30th.
A PPP Loan is different than what most of us think when we hear ‘loan’. Rather than something like a car loan, a PPP loan is designed to be forgiven. The SBA has included provisions that lets the loan be forgiven, so long as it is all spent on payroll. Until at least June 30th, if you get a PPP loan, your payroll will be covered. The interest on any amount not spent on payroll is capped at 4%, making this type of loan all the better. It is important to note that if proper records are not kept or the process is not done completely correctly, it is possible that the application may be denied, or that the SBA may attempt to take back the money. This is why it’s vital to have a lawyer compose and submit the application for you. Do not risk tens of thousands of dollars in an attempt to save an extra bit of cash.
What is an Economic Injury Disaster Loan?
An Economic Injury Disaster Loan (EIDL) is a type of loan offered by the SBA in times of emergency to small and medium sized businesses- typically with less than 500 employees. These loans are highly advantageous in their speed. After applying, applicants are given up to $10,000 within three days as an advance. This advance does not need to be repaid under any circumstances, so long as the money goes towards the business. Unlike PPP loans, there is an expectation of repayment. However, the SBA works to ensure that the interest rate is low. Most business owners can expect a rate of 3.75%, making it invaluable to those wanting to keep their small business running.
There are a few stipulations on being eligible for an EIDL, but the biggest provision is that the business must have less than 500 employees, and be either a sole proprietorship, independent contractor, or employee-owned business. If you aren’t sure if this applies to you or not, schedule a consultation today, because even if we find you are ineligible for an EIDL, we will work to find a solution that works for you and your business.
Why hire a law firm to help me apply?
SBA loans are a complicated matter. There are hundreds of provisions, guidelines, and statutes that need to be followed to the letter to ensure your application goes through smoothly. A delay of even a few days can cause havoc within a small business pressed for cash. We have the knowledge to smoothly process, fill out, and submit these applications. Given how rapidly this situation changes, it is almost impossible to both run your business and remain up to date on SBA news. We are dedicated to following every development and update to make sure the application is filled out properly. If an application isn’t filled out correctly, some tacked on provision not followed, or records not kept you risk losing any loan forgiveness the SBA offers. What would have been free money would be turned into debt you never expected. Schedule a consultation today so we can help you apply for these loans and keep you, your business, and your employees well taken care of.