Small Business Financing Options

Yesterday we outlined the small business financing options available through the CARES Act (Coronavirus Aid, Relief, and Economic Security) that was signed into law by the President, H.R. 748 last Friday, March 27, 2020. These three primary mechanisms are

• the Paycheck Protection Program (“PPP”), which offers $349 billion for small businesses; and
• the Economic Injury Disaster Loan (“EIDL”), which offers $10 billion for small
  businesses
• Existing SBA borrowers receive six-month debt relief on principal, interest and
  fees (i.e., microloans), which approximates $17 billion

In an effort to get money into small business owners’ hands as quickly as possible, the EIDL (https://covid19relief.sba.gov/#/) provides $10,000 advance to small business owners to pay allowable working capital needs; the advance is expected to be paid by the SBA within 3 days. This advance is essentially a grant and is not required to be repaid, even if the application is denied, but the amount of the advance must be deducted from any loan forgiveness amounts under a PPP loan (described below). You can apply for an EIDL, but the focus of this memo is the PPP because it: 1) is where a majority of the money is for small business; and 2) contains grant money or better stated “loan forgiveness,” for which most are interested.

The roll-out of the PPP through local SBA-certified banks is still not completely defined by the individual banks. Some SBA-certified banks have produced applications, but not all of them have come up with their own application instructions.

However, the US Treasury has defined the PPP standards and process, specifically around the PPP application: https://home.treasury.gov/cares.

Rather than waiting on the banks, here are some specific links so that you can get started working on preparing your PPP application:

1. Small Business Paycheck Protection Program Overview: https://bit.ly/2UyfeQ9
2. Paycheck Protection Program Information Sheet: https://bit.ly/3az2deN3.
3. Paycheck Protection Program Application Form: https://bit.ly/2UBCKvY

If you need any assistance through this process, please email us at coordinator@vineyardadv.com.