Currently there are two (2) different economic assistance loans/grants that are available to Businesses. Those loans/grants are described as follows:
Economic Injury Disaster Loan and Loan Advance:
In response to the Coronavirus (COVID-19) pandemic, small business owners (less than 500 employees) 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, IF THE BUSINESS SHOWS THAT THEY HAVE SUFFERED SUBSTANTIAL ECONOMIC INJURY. The SBA’s Economic Injury Disaster Loan program may also provide small businesses with working capital loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing.
The $10,000 loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three (3) days of a successful application, and this $10,000 loan advance will not have to be repaid.
These loans can generally be used for the following purposes:
- Providing paid sick leave to employees unable to work as a direct result of Coronavirus (COVID-19)
- Maintaining payroll during business disruptions on substantial slow downs
- Meeting increased costs to obtain materials unavailable from the applicants main source due to interrupted supply claims
- Rent or mortgage payments
- Repairing obligations other than the ones listed above
Only $10,000 may be received and not repaid. Any additional amounts may be subject to repayment; however, this loan could also be rolled up into a PPP loan which may be forgiven (see below). Economic Injury Disaster Loans are also available to residents in declared disaster areas, which includes Florida. You can go to the SBA website to obtain additional information to see if you qualify.
Paycheck Protection Program (PPP):
Small Businesses, including independent contractors and sole proprietors, with less than 500 employees that were in operation before February 15, 2020 are eligible for these loans. The amount of the loans will be the lesser of 2.5 times the average monthly payroll cost for the prior year of $10,000,000.
Applications will be provided by SBA approved lenders. This loan does not require a showing of substantial economic injury. This is the loan that every business owner should seriously consider. If you meet the guidelines of the loan all of the loan can be forgiven.
Please contact Patrick O'Connor at the O'Connor Law Firm for further details.