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Small business owners across the country can finally breathe a collective sigh of relief after the Senate approved a bill for $484 billion of COVID-19 relief funding late Tuesday afternoon. Roughly $310 billion of the $484 billion are earmarked for the Paycheck Protection Program (PPP). The bill was passed unanimously by the Senate and the House of Representatives is expected to vote and approve the bill as soon as Thursday, April 23rd.
Last Thursday April 16th, small businesses owners were angry to learn that the PPP ran out of funds, in less than 2 weeks. Roughly $350 billion were allocated under the CARES Act for the Paycheck Protection Program (PPP) in the first round of funding. These funds were designed to alleviate the economic downturn of the coronavirus pandemic.
According to a joint statement from SBA administrator Jovita Carranza and U.S. Treasury secretary Steven T. Mnuchin regarding the first round of applications and funding, “The SBA processed more than 14 years’ worth of loans in less than 14 days.”
The Race To Apply Starts Now
For those businesses who have not yet received their PPP loan, but were already approved by the SBA, during the first round of applications, the funds will be coming. For those who have not yet applied, now is the time to get your paperwork ready and to get your application in. Small business owners should be proactive now during this interim period as applications will be processed on a first come first serve basis. If businesses opt to wait, funding may run out again and you will likely miss out on securing these loans.
If history repeats itself and the funds are depleted as quickly as they were the first time, you may want to consider other options for funding. We’ve compiled the following list with additional options for business owners who are still in need of financial assistance:
In addition to the PPP, the CARES Act also introduced an expansion of the SBA Economic Injury Disaster Loan (EIDL) Program, allocating $10 billion for these loans. An EIDL loan is a low-interest loan with a fixed rate of 3.75%. It can provide up to $2 million in assistance for small businesses to pay for emergency expenses. In the past, the EIDL program offered loans solely to business in areas of the country where federally declared disasters such as tornadoes or hurricanes have occurred. With the recent changes however, restrictions have been waived due to COVID-19 to allow businesses in all 50 states, Washington, D.C. and U.S. territories to apply for an EIDL loan.
An EIDL can help you meet necessary financial obligations that your business or private, non-profit organization could have met had the disaster not occurred. It provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDLs do not replace lost sales or revenue.
Main Street Lending Program
The Main Street Lending Program is another loan program included in the CARES Act that was announced on April 9th, 2020. According to a press release from the Federal Reserve, “the Main Street Lending Program will enhance support for small and mid-sized businesses that were in good financial standing before the crisis”.
The program will be rolled out shortly and the Federal Reserve should be releasing additional guidance within the next week, but here is what we know so far:
Alternative Financing Options
If none of the above-mentioned options are right for your business, SBG Funding may still be able to assist you. We strive to offer small to medium sized businesses with loans that have favorable terms and meet the specific needs of every borrower. In addition, when you contact us, you will get a dedicated loan expert who is knowledgeable about your industry and who will offer you a one-on-one personalized service. For more information about any of our funding solutions click here to learn more.
COVID-19 Resource Center
At SBG Funding, we recognize that these are unprecedented times and we are here to help however we can. The situation is constantly evolving, and navigating loan options can be complex and overwhelming. That’s why we’ll be adding new information and resources for small business owners impacted by the pandemic on our COVID-19 Resource Center as soon as it becomes available.
As always, SBG Funding is dedicated to providing unparalleled support and in-depth financial proficiency to help you make the best decision for your business’s future.
*Disclaimer: SBG Funding is not a direct lender for the PPP. We are an agent that has partnered with SBA-approved lenders to rapidly process applications for these loans.*
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