We have some new info from the State on the Disaster Recovery funds. To actually get the area declared as eligible, the State has to receive five SBA validated Economic Injury Worksheets, and then the Governor may request the Economic Injury Disaster Declaration. A county will need to submit at least one valid Economic Injury Worksheet in order to be included in the declaration.
If your business has been impacted, visit https://tdem.texas.gov/covid-19/ and learn more at https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-provide-disaster-assistance-loans-small-businesses-impacted-coronavirus-covid-19.
TX_16381_Fact_Sheet_(COVID_Gov_Cert_EIDL) COVID-19 SBA Disaster Assistance_Resources for Businesses-508 FEMA Public Assistance Memo
COVID-19 SBA Disaster Assistance_Resources for Businesses-508
Updated information 4/2/20:
The Small Business Administration have several programs to assist businesses during the COVID 19 pandemic.
To find the program that best meets your business needs go to: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Paycheck Protection Program – prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses. Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. Under this program:
- Eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount.
- Loan payments will be deferred for six months.
· If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.
Economic Injury Disaster Loans and Loan Advance – In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
SBA Debt Relief – The SBA Debt Relief program will provide a reprieve to small businesses as they overcome the challenges created by this health crisis. Under this program:
- The SBA will also pay the principal and interest of new 7(a) loans issued prior to September 27, 2020.
· The SBA will pay the principal and interest of current 7(a) loans for a period of six months.
SBA Express Bridge Loans – Allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan
- Up to $25,000
- Fast turnaround
- Will be repaid in full or in part by proceeds from the EIDL loan
Summary of Paycheck Protection Program (listed above)
ACTION: Work with your accounting department to track expense and contact lenders now to see if they are an approved SBA lender
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Lenders may begin processing loan applications as soon as April 3, 2020.
- These are subsidized loans which have forgivable portions
- Business with <500 employees (includes non-profits, churches and sole proprietor) are eligible
- The loan is to support ongoing operation and retain workers. It will pay for 8 weeks of payroll, mortgages , leases and utilities.- 75% of loan must be for payroll
- Business should be working with their accounting departments now to begin cost roll ups and gathering information – the goal is to maximize loans received and forgivable amounts
- Maximum Loan is 2.5 x month net income up to $10 million
- Maximum forgivable portion for 1 EE is $100,000
- Eligible – salary, retirement benefits, health insurance premiums and certain payments to independent contractors
- Ineligible payroll tax, workers comp, compensation over $100K per 1 EE or credits received und the Family First Coronavirus Relief Act (FFCRA))
- Forgivable portion of the loan is not taxable, loans do not require personal guarantees or security
- Unforgiven portion is maximum rate of 4% for 10 year, payments are deferred up to 1 year with 6 months subsidized
- Forgivable amount is reduced if there is a workforce reduction. or if salaries are reduced
- Employees on paid leave are still considered employed
For information on Paycheck Protection Funding go to: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources