The Small Business Administration (SBA) is offering Paycheck Protection Program loans until May 31, 2021, by an announcement from President Joe Biden, who announced program changes to make access to PPP loans more equitable. Three programs potentially can get small-business owners back on their feet, including Economic Injury Disaster Loan (EIDL), PPP and Shuttered Venue Operators Grant (SVOG) program.

Mike McWhorter, SBA’s Kansas City district, spoke at a free webinar last week to explain the American Rescue Plan Act. The program provides additional financial relief for the nation’s small businesses.

The president has allowed an additional deadline of two months through May 31, 2021. SBA has an additional 30-day period to process applications that are still pending.

The SVOG program now allows businesses to apply for both a PPP and SVOG. A new $28.6 billion for the Restaurant Revitalization Fund for industry-focused grants is available. Plus, a new $100 million to establish a Community Navigator pilot program; grants will go to eligible organizations supporting efforts to improve access to COVID-19 pandemic assistance programs and resources.

McWhorter works with local bankers administering the SBA loans for the small business and entrepreneur. 

EIDL loans

The CARES Act considers the pandemic as a natural disaster. EIDL loans provide economic relief to small businesses and nonprofit organizations currently experiencing a temporary loss of revenue.

Loans backed by SBA for an EIDL loan for working capital are based on a 30-year term with no penalties and may defer for years after receiving the funding. Loans under $25,000 require no collateral. Higher amounts will require collateral.

SBA works for small businesses. McWhorter said, “When in doubt? Apply.” An  SBA representative working with the bank can answer all your questions and steer a small business to the right loan. McWhorter also told the listeners to contact SBA first for advice and then a local banker can help them through the loan process.

Many ask if credit is a factor. EIDL checks credit; however, you can ask for reconsideration if the credit happened because of the pandemic. Default with a federal loan with SBA or the U.S. Department of Agriculture will be a credit factor; student loans will not.

PPP loans

The PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. 

First, find a lender. With 650 banks in the region taking these loans, SBA can help with a lender match. Expenses are paid and federally tax-deductible. Small businesses need to refer to the Internal Revenue Service for specific filing instructions.

Loan terms are fixed at 1 percent. A PPP loan is a two-year term, no fees, but can extend to five years. Then, apply for forgiveness. 

Businesses can apply for all the programs, even if they get denied government-backed loans through the banker. The loans cannot overlap.

SVOG program

The Shuttered Venue Operators Grant (SVOG) program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and amended by the American Rescue Plan Act. The program includes over $16 billion in grants to shuttered venues, to be administered by SBA’s Office of Disaster Assistance.

Eligible applicants may qualify for grants equal to 45 percent of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. A total of $2 billion is reserved for eligible applications with up to 50 full-time employees.

The grant program opens in the portal at SBA.gov on April 8.

The speaker reminded the listeners that information changes; keep updated on the website at sba.gov/svogrant or with your banker.

Credit issues

The new Women’s Center serving the area will help with healthy ways to move a credit score in about six months. They are there to help new and small businesses start and keep in business. If you get in a financial bind, SBA will help you with setbacks by offering interest-only payments or spreading the payments out.

McWhorter concludes, “SBA wants to get you back on their feet.”

For assistance, call SBA’s Kansas City District at 816-426-4900. The Women’s Center is scheduled to be in Buffalo twice a month and offers service by phone at 417-646-6900.

Note: All information cited is from the webinar and the SBA.gov website.

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