The Small Business Administration: COVID-19 Relief Funding Options

Silvermyst

Silvermyst

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Have any of you Computer Repair business going to use or qualify for any of these programs that the government is giving us?



Here is the info on it:
Last Updated April 3, 2020

Our nation's small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
Funding Options
In addition to traditional SBA funding programs, the CARES Act established several new temporary programs to address the COVID-19 outbreak.

Paycheck Protection Program:
An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
Economic Injury Disaster Loan (EIDL) Advance:
This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.
SBA Express Bridge Loans:
This loan enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
SBA Debt Relief :
The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.

Disclaimer: Please note that our guidance is designed only to give general information on the topics and issues covered. The information provided is not intended to be a comprehensive summary of all laws which may apply to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your legal advisor regarding the specific application of the information to your situation.
 
Yup..the EIDL is for EVERY BUSINESS..from tiny 1x man shows to large. In more detail, it's a loan of up to 2 or 200 million (I forget because we didn't apply for a high amount)..at 3.75%. Up to 200k of that can be unsecured. And the first $10,000.00 of it is "forgiven"..so that's a grant. The Feds are doing this to help keep businesses alive for a bit. You do this at the SBA website. Granted 10k won't help for long for some of us..for others it will. My wifes Real Estate business..she's a sole prop..working out of our home, so that $10k can go pretty far for her..help her tread water for a few months. For us at work..we can devour that 10k quickly on the first day of the month..but hey, it helps, and that's what it's there for.

And the gov't is basically paying your employees for 2x months. So you apply for the PPP..and you put down 2.5x your W2 expenses for 8 weeks. The Feds are doing this to help keep economy moving along...keeping people employed (off of unemployement). You download the PPP form...fill it out, and go to the bank that your businesses is using..stand in line..and do that there. They get reimbursed by the Feds.

You can apply for and receive both. You can't use them both for the same thing. So document what you use them for. You appear to have 8x weeks to use up the PPP..and what you don't use..the remainder I think turns into a loan you pay back, or you just give it back. But you can use it for things other than just payroll.
 
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Predictable 'bumps in the road' for the PPP program include:
  • You must apply for this through a bank that works with the SBA
  • Not all banks (even if they normally work with the SBA) are participating in this program
  • Banks that ARE participating are prioritizing who can apply
    • Existing customers only
    • Existing customers who already have a loan for their business through the bank (since that is where the bank has the most risk) are done first, then
    • Existing customers who do NOT have a loan for their business through the bank will be done after those with loans
  • Banks are still working out how to do these since only partial guidance has been issued so far, and even that was done at the eleventh hour
  • The SBA website/system that the banks must use is, not-surprisingly, overloaded and frequently crashed/down.
As a result, many folks don't have an avenue to even apply. Folks that were lucky enough to NOT have existing loans through their bank are on the back burner, and may find that the funding pool will be exhausted by the time their banks get around to them. Folks whose banks are not participating are, for the moment at least, out of luck.

You should definitely call your bank to find out what they are doing and what your path is to apply for PPP. Even if you will be on the back burner for them, you want to get in queue as soon as you can.
 
Yeah, and then there's the massive confusion about self-employment earnings and how to apply there. They are saying that on the 10th self-employed people can apply too (if there's even a dime of money left by then). But what do you do when you're an LLC filing taxes as an S-Corp. I get about half my pay through payroll and the other half as dividends. So do I file as a company having employees (me and the wife) or do I have to wait to apply until I can do it as "self-employed" so I can actually count my dividends portion toward the loan amount?

The one SBA bank that's local doesn't seem to know the answer.
 
DataMedics said:
Yeah, and then there's the massive confusion about self-employment earnings and how to apply there. They are saying that on the 10th self-employed people can apply too (if there's even a dime of money left by then). But what do you do when you're an LLC filing taxes as an S-Corp. I get about half my pay through payroll and the other half as dividends. So do I file as a company having employees (me and the wife) or do I have to wait to apply until I can do it as "self-employed" so I can actually count my dividends portion toward the loan amount?

The one SBA bank that's local doesn't seem to know the answer.
Click to expand...

Self-employed usually = sole proprietor. Ask your accountant, they'll be the most likely to give you the correct answer.
 
DataMedics said:
But what do you do when you're an LLC filing taxes as an S-Corp. I get about half my pay through payroll and the other half as dividends. .
Click to expand...

Since you're already there (s-corp)(yes I know..llc...but "filing as".)....watch this video.
I know it's long, and the intro takes a bit to get going because of the labcoat agents and that one guy acting like an idiot. The accountant they are interviewing (giving the speech)...he's VERY animated and drank too much coffee or energy soda. I know it's an hour long...but watch it. He's very knowledgeable about this Covid stimulus program, when so many other accountants are clueless about it. So suffer through it..and come out the other end of the video smarter! Answers SOO many questions bluntly and directly....and with some good tips.
 
Yeah, he seems to suggest that the Schedule K-1 income doesn't count, despite being a primary income source for most S-Corp owners. Yet, I do see at least one SBA bank's website that lists Schedule K as a form to provide when applying for the PPP loan. So maybe it's still up in the air. Perhaps by Friday there will actually be some guidelines on that....
 
They are still revising the rules now. It's changed a few times. BB&T still hasn't figured it out yet... and, has anyone got any money from the Disaster relief bit yet? Thought that was going to be in 3 days, a week and a half ago.
 
So far I'm doing pretty well. I don't think I'll need any loans to keep my business running. However, that could change depending on how long this is going to drag out, and having a $10,000 grant sounds good to me. I've already applied but haven't heard a peep. They didn't even email me when my application was over. I have the application number, but so far I've gotten nothing. This is a disaster for businesses that need immediate funding, as well as those individuals that need unemployment. What are these people supposed to do in the meantime while the government sits there with its finger up its a$$? Starve?

The Federal Reserve or the government itself should be giving out these loans. Relying on dozens of other companies that would rather sell lucrative XX% loans to desperate businesses and expecting them to do the right thing is insane.

What the government needs to do is freeze everything. All mortgages, credit card payments, rents, etc. need to be frozen for the duration of this lockdown. Then support people with unemployment so they can afford food. They can't keep everyone in their homes and then insist that they pay even though they have no source of income. Forcing businesses to go into debt during a pandemic is WRONG.
 
sapphirescales said:
The Federal Reserve or the government itself should be giving out these loans

What the government needs to do is freeze everything. All mortgages, credit card payments, rents, etc. need to be frozen for the duration of this lockdown. Then support people with unemployment so they can afford food. They can't keep everyone in their homes and then insist that they pay even though they have no source of income. Forcing businesses to go into debt during a pandemic is WRONG.
Click to expand...

Uh...they are! The Feds ARE giving these loans. Might wanna check up to see what sba.gov is.

They HAVE been urging this from the get go. Getting mortgage companies to do modifications (we already did ours...easy peasy..3x months removed and moved to the end of our mortgage), car insurance companies realizing people aren't driving much..so giving rebates (already got ours), rules that land lords cannot evict people during this for non payment.

And I really don't see where you think the Feds are "forcing business to go into debt"....please point to where they're doing that? I see the opposite....dunno if you've even read this thread. You basically get 2x FREE....ef-ar-ee-ee...FREE...grants right off the top. EIDL...up to $10k in a loan that is "forgiven". Forgiven means...you do not have to pay it back. Essentially that's a grant! $10,000.00 ...for free..to help float the business. Also part of that the option to borrow a HECK of a lot more money at VERY low interest rate. Secondly...they fund your bank (reimburse)....so that the bank gives you FREE payroll for 2x months. You get to keep your employees....FREE....for 2x months (aka 8x weeks)...and it's 2.5x your months payroll costs so it also coves most of your actual employee burden such as health insurance. That's what that extra .5x is on the multiplier.

Off to the office now....got 3x emergencies already this morning from clients!
 
YeOldeStonecat said:
Uh...they are! The Feds ARE giving these loans.
Click to expand...
Really? Then why are slimy companies like Wells Fargo and other banks giving out the loans? Why are they involved at all? They're cherry-picking the customers who will have access to said loans.

All the government is doing is removing the risk from the loans for these banks (which amount to another bailout in addition to the other bailout they've already gotten!) so they'll "generously" give us a 1% interest rate. At first it was interest free, then the banks complained so the government made it 0.5%, then they still complained about getting FREE money so they upped it to 1%.

It wouldn't surprise me at all if they kept bumping up the interest rates on these "generous" loans and that they get more and more picky who they'll actually give the loans out to (even though the loans are supposed to be for ALL small businesses affected by the pandemic, NOT just the ones most favorable to the banks).

This is just another bailout. Free money for the banks, but loans that have to be repaid by the business owners. The government is CLAIMING that they'll forgive $10,000 worth to incentivize basically broke companies to take these loans, but the reality will probably be much different (a million "gotcha's" so that only 1% or less of businesses actually qualify for the loans to be "forgiven.").

Our government is NOT there for us. It's there for the banks and itself. I don't even think they'd distribute food to the people if people were staving in massive numbers. They'd rather give it to the airlines, banks, or prop up the stock market (which only benefits the rich). I hate this freaking country. We are taxed so much and given so little it's insane. Oh, but we have a huge military to protect this horrible way of life we've created for ourselves.

We live in a country with basically no medical care without fear of going bankrupt when you use it (even if you have insurance), where corporations crush the little guy at every given opportunity, the cost of tuition causes young people to be in debt until their 30's, unable to buy a house or start a family, the food is full of chemicals causing severe health issues, etc.

And the worst part? The taxes in countries that have free medical, free college, and the government is actually there for the people are just about the same as ours. In America, there are NO social safety nets. If you're down on your luck, you just end up homeless living on the street just like in some sh*thole third world country.

If I didn't have an established business here, I'd move to another country. America used to be great, but the things that used to make it great are outdated. I'd rather live in a country that takes care of its citizens than old America, which still never provided medical care or education to its citizens. The reason why old America was great was because taxes were low and there were a lot of opportunities. So either don't tax the hel* out of people so they can actually afford to pay for their own medical care and education or actually GIVE them something for the taxes you charge. You can't have it both ways.
 
sapphirescales said:
Really? Then why are slimy companies like Wells Fargo and other banks giving out the loans?

And the worst part? The taxes in countries that have free medical, free college, and the government is actually there for the people are just about the same as ours.
Click to expand...

Who the heck would pick a slimy loaner like wells fargo? Yuck. Do homework and pick GOOD local banks, or better yet....local credit unions.

Already answered about the PPP..the Feds are reimbursing the banks for the PPP.

Should revisit that list of countries with uni healthcare..and look at their tax rates again. You'll find more around the high 30% to 45% rate...some over 50%. Can you imagine looking at your paycheck and seeing >50% of it taken out...just for taxes? UGH!!!! No way for me!
It's all basic math....pay it now, or pay it later, pay it direct, or pay it by having the gov't reach into your paycheck and take it out before you get the check (what's left of it) handed to you. Granted...yes the lobbying and "big pharma" has run away in the US and driven costs up. Combined with law suite happy people causing insurance for healthcare providers to skyrocket in costs. But that's a separate issue. My 2nd wife was from Calgary...I got a good earful of comparisons of healthcare up there. Do you enjoy going to the motor vehicle department to get things done? I don't...I dread trips to the DMV. Yeah...gov't run things don't always do the best....I'll pass on that. Also there's a reason that the rich from other countries come to the USA to get higher end procedures done...we have some exceptionally good healthcare. I like having a choice...that I'm not forced to go to some local doctor that the medical equivelant of a public defendent! I can opt to go see "the best" in the area for what I'm needing...like having surgery on my spine or something...not going to trust that to just any doc.
 
The tax rates paid by the nations with the single payer systems are high... but they are substantially less than our tax rate combined with our insurance rates.

But that's the only point in which your analysis breaks down. And it's a bit of semantics, the real issue with healthcare in the US is the overall cost of it is beyond the reach of the bulk of the citizenry. Going single payer doesn't solve that problem, it just pushes the cost out over more people.

But our refusal to do any form of collective bargaining is why the US pays so much, every time another nation forces the prices down with a new law, our prices go up to balance the books. So the rest of the world had better pray the US doesn't go single payer, because if we drive that particular blunt force object, either everyone else's prices skyrocket... or the entire industry goes bankrupt. Either way, things get far worse for everyone.
 
Finally got around to applying for my slice of the EIDL pie. They claim it'll be a week till I hear from them. Certainly not going to hold my breath on that one.
 
Like any other government program like this timing is everything and nothing. Start too early and they aren't ready so you have to start again. Wait too long and the money's gone.
 
I applied for the EIDL on 4/3. At the end, you get an application number displayed, but I note no date anywhere on that page when I printed it. There is no contact information, no way to check on the status of your application, no email confirmation, nothing. Basically, don't call us, we'll call you.

I also completed a preliminary application for PPP with my bank on 4/3 (a regional bank). To my surprise, I got a call from them today. "We've received your information, and will be calling you within a week to go over the details and complete your formal application. Please have the following documents ready for when we call." That makes me more optimistic on that bit at least.
 
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