Funding Options for Business Owners During Lockdown

Dec 18

When the COVID-19 pandemic started and everything shut down to social distance, the CARES act provided funding for various organizations to help small businesses. During this time we knew it was going to be difficult for small business owners - the fear of the unknown, impact of not being able to open storefronts, gyms, restaurants and many other establishments. While many cities have local grants for business owners, those are on an area by area basis - for example, I’m outside of Boise but I can’t take advantage of the grants for small businesses because they’re specifically for PPE (personal protective equipment). These grants can be a great point of assistance for business owners, so definitely look into what options are available to you locally.

Additionally, there are two programs from theSBA Small Business Administration that I want to talk to you about: EIDL (Economic Injury Disaster Loan) & the PPP (Paycheck Protection Program).

Let’s start with the EIDL:

A loan - will need to be paid back
Includes a $1,000 free credit if you don’t take the loan
Interest rate of 3.75% for 30 years
Worst case scenario for business owners (this was a last resort option, historically)
CARES act removed stipulations making this easier for business owners to qualify for
You apply directly through the SBA

Now let’s get into the PPP:

Only available for a limited amount of time (currently not accepting new applications)
Designed to help business owners pay employees their regular wages for 8 weeks of quarantine
While this is technically a loan, it can be forgiven if 65% of the amount is used for employee wages and business rent.
65% of the funds are required to be used for the categories above within 12 weeks of funding in order to be forgiven
Must have updated business bookkeeping, tax returns & bank statements to apply
You apply via participating banks (the funds are then backed/supplied by the SBA)

In the near future we may have another lockdown to stop the spread of COVID-19, with this business owners will face another set of obstacles but being educated on these resources may actually make or break your business. As of December 2020, the PPP is not available but it may be in the near future so you need to be ready to apply - make sure all of your business bookkeeping, taxes and bank statements are up to date & ready to go.

Need help with your books? Send me a message so we can make sure you’re prepared to take advantage of this support!