Emergency business loans

Seeking emergency business funding due to Covid-19?

There are several options available to business owners and stakeholders experiencing economic instability. Please see our information below to understand your emergency Covid-19 financing options.

Breaking News

The SBA has issued some additional guidance on the CARES Act Paycheck Protection Program (PPP) which includes the following:
  • The interest rate is now 0.5% (down from 4%)
  • The loan maturity is now 2 years (down from 10 years)
  • The first loan payment is deferred for 6 months
  • No collateral or personal guarantee required
  • No SBA or lender fees

Your Emergency Funding Options

Needing funding fast? We recommend the CARES Act Loan.

CARES Act SBA 7(a) Relief Loans*

  • You can apply through ALTERNATIVE CAPITAL SOLUTIONS
  • Loan amounts up to $10,000,000
  • Interest rates will not exceed 4% for eligible for-profit and non-profit businesses
  • Fully amortizing loan terms of 10 years
  • Loans proceeds to include payroll support (including paid sick or medical leave), employee salaries, mortgage payments, insurance premiums and any other debt obligations incurred before 2/15/2020
  • SBA guarantee fees and lender fees will be waived
  • No prepay penalty and no personal guarantees
  • The “credit elsewhere” test and collateral and personal guarantee requirements would be waived during the covered period
  • A borrower with a current EIDL loan can only also receive the CARES Act SBA 7(a) Relief Loan if the EIDL loan is unrelated to COVID-19

Economic Injury Disaster Loan (EIDL)

  • We can help you apply through the SBA
  • Loan amounts up to $2,000,000
  • 3.75% interest rate for for-profit businesses
  • 2.75% interest rate for non-profit businesses
  • Loan terms will not exceed 30 years
  • Only available in states with SBA approved declarations of disaster (check the most current State availability list here)
  • Through our sources we’ve heard there are currently over 25,000 applications submitted so far, with at least a 3-week approval lag time. It can be assumed that approval times will only increase as more applicants apply
  • If you receive an EIDL, you will not be eligible for the CARES Act SBA 7(a) Relief Loan

Get a $10,000 Emergency Advance

You can get up to a $10,000 grant from the SBA for your small business while you wait for your larger CARES Act Paycheck Protection Program (PPP) Loan or SBA Economic Injury Disaster Loan (EIDL) Follow the below steps:

  • Go to https://covid19relief.sba.gov/#/
  • Fill out the application
  • On the page titled “Additional Information”, make sure to click on “I would like to be considered for an advance of up to $10,000”
  • Complete application

This grant provides an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). If you already filled out an application, you are still eligible for this grant, however, it has not been made clear if you need to go back and request the grant or fill out a new application.

The advance does not need to be repaid under any circumstance, and may be used for business purposes, including: to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. (See p. 28, Section 1110(e)(5) of H.R. 748 (CARES Act))

CORONAVIRUS EMERGENCY LOANS

Small Business Guide and Checklist

Prepared by the U.S. CHAMBER OF COMMERCE

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency.

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their
payrolls afterward.

The administration soon will release more details including the list of lenders offering loans under the program. In the
meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.

Here are the questions you may be asking— and what you need to know.

Am I ELIGIBLE?

You are eligible if you are:

  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SBA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An individual who operates as a sole proprietor
  • An individual who operates as an independent contractor
  • An individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organization that meets the SBA size standard

In addition, some special rules may make you eligible:

  • If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis
  • If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply

REMEMBER: The 500-employee threshold includes all employees: full-time, part-time, and any other status.

What will lenders be LOOKING FOR?

In evaluating eligibility, lenders are directed to consider whether the borrower was in operation before February 15, 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors.

Lenders will also ask you for a good faith certification that:

  1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations.
  2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
  3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here
  4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan)

If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents (final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

What lenders will NOT LOOK FOR

That the borrower sought and was unable to obtain credit elsewhere.

A personal guarantee is not required for the loan.

No collateral is required for the loan.

NON SEASONAL EMPLOYERS:

Maximum loan = 2.5 x Average total monthly payroll costs incurred during the year prior to the loan date

For businesses not operational in 2019: 2.5 x Average total monthly payroll costs incurred for January and February 2020

SEASONAL EMPLOYERS:

Maximum loan = 2.5 x Average total monthly payments for payroll costs for the 12-week period beginning February 15, 2019 or March 1, 2019 (decided by the loan recipient) and ending June 30, 2019

How much can I BORROW?

Loans can be up to 2.5 x the borrower’s average monthly payroll costs, not to exceed $10 million.

How do I calculate my average monthly PAYROLL COSTS?

INCLUDED Payroll Cost:

1. For Employers: The sum of payments of any compensation with respect to employees that is a:

  • salary, wage, commission, or similar compensation;
  • payment of cash tip or equivalent;
  • payment for vacation, parental, family, medical, or sick leave
  • allowance for dismissal or separation
  • payment required for the provisions of group health care benefits, including insurance premiums
  • payment of any retirement benefit
  • payment of state or local tax assessed on the compensation of the employee

2. For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: The sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in one year, as pro-rated for the covered period.

 

 

EXCLUDED Payroll Cost:

1. Compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the period February 15, to June 30, 2020

2. Payroll taxes, railroad retirement taxes, and income taxes

3. Any compensation of an employee whose principal place of residence is outside of the United States

4. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act (Public Law 116– 5 127); or qualified family leave wages for which a credit is allowed under section 7003 of the Families First Coronavirus Response Act

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