US Small Business Administration reminds Hoosiers to file for disaster loans - WNDU-TV

US Small Business Administration reminds Hoosiers to file for disaster loans - WNDU-TV


US Small Business Administration reminds Hoosiers to file for disaster loans - WNDU-TV

Posted: 27 Mar 2020 01:42 PM PDT

The U.S. Small Business Administration is reminding businesses that April 29 is the filing deadline for disaster loans.

This, as a result of excessive rain and flooding that happened last March in Indiana.

The loan program is available to those who suffered financial losses.

If you were affected, you can apply online.

Applicants may apply online using the Electronic Loan Application (ELA) via SBA's secure website at DisasterLoan.sba.gov. Disaster loan information.

Small Business Association (SBA) Loan Types - Brewers Association

Posted: 27 Mar 2020 10:44 AM PDT

SBA Loan Types

There are multiple types of loans that breweries and other small businesses will be able to apply for from the Small Business Administration (SBA). Breweries should work with an SBA lender to learn what type of loans will work best for their business.

The SBA does not provide direct loans. The process starts with your local lender, working within SBA guidelines.

7(a) SBA Loans

  • The 7(a) loan program is the SBA's primary program for providing financial assistance to small businesses under the Payment Protection Plan. The terms and conditions, like the guaranty percentage and loan amount, may vary by the type of loan. 
  • Under the Payroll Protection Program (PPP) in the CARES Act, breweries with less than 500 employees may apply for 7(a) loans to help them cover business costs during the COVID-19 crisis. If breweries use those funds to cover payroll and meet specific requirements a portion of their loan can be forgiven by the SBA. It is important to speak with your lender to ensure you have clear understanding how you can qualify for the loan forgiveness.
  • In addition to small businesses, sole-proprietors, independent contractors, and other self-employed individuals are also eligible for these loans.
  • The loan amount is tied to payroll costs incurred by the business to determine the size of the loan, with a maximum loan amount of $10 million. This amount is available only through December 31, 2020. See COVID-19 SBA Loan Q&A.
  • Lenders are required to determine whether a business was operational on February 15, 2020 and had employees for whom it paid salaries and payroll taxes.
  • There are limitations on the assistance a borrower can receive on these loans and economic injury disaster loans (more information below) through SBA for the same purpose. 

Economic Injury Disaster Loans (EIDL) and Emergency Grants*

According to the SBA website, for your state to qualify for economic injury disaster assistance loans (EIDL) at least five small businesses within the state/territory have suffered substantial economic injury. The SBA has declared that disaster assistance loans will be available statewide following an economic injury declaration. This will apply to current and future disaster assistance declarations related to Coronavirus.

  • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of the disaster's impact. The interest rate is 3.75% for small businesses. 
  • SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower's ability to repay.  SBA is allowed to approve and offer these loans based solely on an applicant's credit score, or use an alternative appropriate alternative method for determining applicant's ability to repay. 
  • The CARES Act also establishes an emergency grant to allow an eligible entity who has applied for an EIDL loan due to COVID-19 to request an advance on that loan, of not more than $10,000, which the SBA must distribute within 3 days. It also states that applicants shall not be required to repay advance payments, even if subsequently denied for an EIDL loan.
  • In advance of disbursing the advance payment, the SBA must verify that the entity is an eligible applicant for an EIDL loan. This approval shall take the form of a certification under penalty of perjury by the applicant that they are eligible.
  • Outlines that advance payment may be used for providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.

*The CARES Act provides a limitation on a borrower from receiving this assistance and an economic injury disaster loan through SBA for the same purpose. It does allow a borrower who has a disaster loan unrelated to COVID-19 to apply for a PPP loan, with an option to refinance that loan into the PPP loan. The emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven under the Paycheck Protection Program.

Stimulus bill offers help for small businesses, ag community impacted by COVID-19 - KWCH

Posted: 27 Mar 2020 08:22 PM PDT

WICHITA, Kan. (KWCH) While a stimulus bill working its way through Congress prioritizes relief for American workers impacted by the COVID-19 pandemic, lawmakers in Washington, D.C. also want to help out small businesses, farmers and ranchers that are impacted.

Thursday, Eyewitness News spoke with U.S. Senator Jerry Moran (R-Kan.) to find out what you can do to get help for your business.

Moran and the local Small Business Administration (SBA) offer detailed information about the CARES ACT , expanding the 7-A Loan Program through the SBA and other features meant to provide a boost to struggling small businesses.

If the stimulus bill becomes law, that program will help any for-profit or nonprofit business, whether or not they are closed due to COVID-19 or are still operating.

The Kansas Small Business Development Center is scheduled to host a webinar this coming Monday at 10 a.m. to provide small business owners with more guidance.

You can register for the webinar here.

Friday, we spoke with Rep. Roger Marshall (R-Kan.) about what people in the agriculture community can do right now to take care of federal aid.

The first thing you can do is get in touch with your local farm service agency, your FSA officer. FSA offices are open by phone appointment only and they'll use email and online tools when they can.

Similar to other small business owners, if you're a farmer or rancher, it's important for you to familiarize yourself with your local small business administration (SBA). Those SBA loans will factor into determining on what a lot of ag producers can get relief.

The USDA announced its own resource page dedicated to all things coronavirus. You can find that page here: https://rd.usda.gov/coronavirus usda.gov/coronavirus

You can find more information from the FSA on the stimulus for farmers and ranchers, including deadlines here: fsa.usda.gov.

Venture capital-backed start-ups fear they won't get relief from small business stimulus - CNBC

Posted: 27 Mar 2020 10:53 AM PDT

Getty Images

Small businesses are lining up to get help from government loans. But they might not get it if they've taken venture capital or private equity money.

A $2 trillion stimulus bill to blunt the economic effect of coronavirus has $350 billion earmarked for loans to businesses with fewer than 500 employees, managed through the Small Business Administration. 

Start-ups and their investors fear a so-called "affiliation" rule could prevent access to that safety net. The ruling is on a case-by-case basis and can be triggered if the company has taken money from a private investor.

The Small Business Administration, or SBA, said it considers ownership, management, contractual relationships and minority shareholders. The affiliation rule applies if a venture firm owns half or more of a company's voting stock. It can also be triggered if multiple firms' holdings "are large" compared with other stock holdings. 

In some cases, even if a start-up has 30 people working there, it could be "affiliated" with the thousands of other employees at its investors' separate portfolio companies. Therefore, it wouldn't be eligible for SBA loans.

In the meantime, Justin Field, head of government affairs at the National Venture Capital Association, said excluding start-ups from the loan program could result in waves of layoffs. 

"If start-ups don't get access to this lending facility soon, it's a lost opportunity to keep people employed," Field told CNBC in a phone interview, adding that 2.2 million Americans now work at a VC-backed company. "Start ups everywhere are going to get hit if we don't get this fixed."

The House of Representatives passed the $2 trillion plan Friday afternoon, which will go to the president's desk to be signed. Even though the bill passed in its current form, Field said there could be added clarification or guidance from Treasury or the SBA that would ease the affiliation rules for VC-backed start-ups. 

Optics of a bailout 

One potential hangup is the perception that start-ups have unlimited access to venture capital cash. Private equity, which includes venture capital, had $1.5 trillion in so-called "dry powder" going into this year, according to data from Preqin.

There's a "misconception" of the role of private equity investors in an crisis, according to Field: They are largely focused on keeping the lights on and making sure the companies themselves don't go under — not on keeping U.S. jobs intact.

"The correct role is to keep these entities alive. You can't always go to an investor and say 'give us money for payroll,'" he said.

Reena Aggarwal, vice provost and finance professor at Georgetown's McDonough School of Business, said the way the bill is written, most start-ups are considered affiliates of their private equity of VC firms. But there's "not much political interest" to change the way it's written, she said. 

"There are conversations around private equity firms sitting on a lot of cash, she said. "People in Washington are concerned about the optics — it might look bad bailing out PE-owned firms, even though they deserve it as much as anyone else."

Start-ups will likely feel pressure from the economic slowdown, especially those in hospitality or travel. Investors are already thinking about cutting costs, which can come from a few levers. 

"Depending on the industry, it's either people or capital expenditure," Aggarwal said. "If revenue is not going to be increasing, there's got to be cost-cutting somewhere."

Coronavirus 'good scenario' could be 20% of small businesses fail - Yahoo Money

Posted: 27 Mar 2020 02:21 PM PDT

The former head of the Small Business Administration under Barack Obama hailed the arrival of the coronavirus stimulus package, but warned of catastrophic outcomes for a large number of American small businesses.

"I think we are going to lose a lot of small businesses here," said Karen Mills on Yahoo Finance's The Final Round. "There's always small businesses on the edge. You know, this is clearly going to push some of them over."

According to Mills, currently a Senior Fellow at the Harvard Business School, small businesses have just around 27 days on average in cash. Restaurants have even less, with 17 days of cash on average. And if you run out of cash, Mills said, "you're dead."

"I think that this is going to be maybe 20%, even 30% of small businesses could fail even in a good scenario," she said.

There are a few reasons. While Mills applauds the number, $347 billion to small business, she is still concerned whether it will be enough. Furthermore, there's another problem — the logistics of getting that money to businesses before the cash runs out.

"A lot depends on what happens between the banks and the fintechs and the Treasury and the SBA in the next week," she said. "When I read the bill, it was pretty clear that they were going to rely on the old piping system of the lender banks."

In Mills' view, that system may not have the speed required, and banks ought to partner with PayPal (PYPL) and Square (SQ), which have extensive small business networks.

The stakes here are made even higher by the fact that small businesses are delicate.

"If we don't keep these small businesses afloat they're very, very hard to restart," she said. "If we want to have a very V-shaped, U-shaped curve here in a recovery, we need to keep them solvent for a period of time."

The current bill has eight weeks of help, but again, Mills said more may be required.

A man picks up takeout food in a restaurant in Rolling Meadows, Ill., Friday, March 27, 2020. Some restaurants are offering takeout and delivery service during the coronavirus pandemic. (AP Photo/Nam Y. Huh)
A man picks up takeout food in a restaurant in Rolling Meadows, Ill., Friday, March 27, 2020. Some restaurants are offering takeout and delivery service during the coronavirus pandemic. (AP Photo/Nam Y. Huh)

"I'm hoping that we use all of that $349 billion and then need to re-up it because that will mean we're stimulating what needs the money," she said.

The former Small Business Administration chief ended with a message to large businesses on how they can help their smaller counterparts: "pay your bills."

"We need to make sure that big companies pay their bills on time or in advance," she said. "One thing we did in the last crisis that actually was very valuable was the government paid its bills in 15 days."

Mills said she hopes the White House will continue to pay its small business contractors in 15 days or even right away.

"Any agency that has a bill that is owed to a small-business contractor, I say roll up the truck, unload the cash, and get that cash into the supply chain — into those small businesses right now," she said.

--

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.

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