It has been more than one month that coronavirus (COVID-19) has forced half of the world to shut down. The united states have been suffering several issues as well. One of the most pivotal problems that concern both people and government is the increase in financial difficulties and financial losses. According to statistics, coronavirus has caused notable effects in the daily working process. Although many businesses have changed their work style to remote working, the number of those forced to shut down and skip work during quarantine is notable. The catastrophe has affected small businesses as well. Many small business owners claim they would have no chance, but the employee adjustment in case corona continues to obstacle their working.
On the other hand, the government is trying to decrease the corona’s taints by planning new auxiliary financial programs for businesses. The president signed a law on March,27,2020, which contains $376 billion to help small American companies under the CARES Act.
CARES Act has established new temporary funding programs besides the SBA’s customary funding services, to help small businesses overcome coronavirus financial loss disasters.
Here is a list of new funding programs available on sba.gov.
Coronavirus Relief Programs:
1.Paycheck relief protection
In this program, SBA offers a direct loan to businesses for their payrolls, rents, place loan interests, and other business-related utilities. SBA forgives the loans if the business owner keeps on paying employees for eight weeks. You (as a small business owner) can request for this loan through an SBA loaner or any federally certified depository organization. The loaner will evaluate the applications from April 3rd, and your credit may be available by June 30th.
Eligible cases for a paycheck loan are all small business that meets SBA’s small business’s description, businesses with a 72 starting NAICS code and all self-employed.
SBA will completely forgive the loan if the business owner maintains or rehires all employees. This loan has a 1% interest rate and a payback time of 2 years.
2.EIDL loan advance
EIDL is a contraction term for Economic Injury Disaster Loan. This program provides $ 10,000 relief aid to help small businesses reduce their corona related financial issues. All small businesses around the USA are eligible for this program. They can request for help up to $10,000. If your application evaluates positively, you will likely get the fund to make up your financial losses caused by a coronavirus(COVID-19). You do not have to repay this loan.
Any small business in the united states, which has less than 500 employees, can apply for EIDL small businesses’ loans. Sole proprietorships, independent contractors and self-employed are included. Furthermore, industries with more than 500 staff that meet SBA’s size standard conditions may be eligible, too.
EIDL small businesses’ loan program can be very efficient in resolving the recent corona-related problems since repayment is not required.
3.SBA Express loan
SBA’s express loan for small businesses allows up to $25,000 access if you have a relationship with an express lender. This program is an excellent option for your business if you have to cover a financial gap, and you cannot wait for the evaluation results of your direct loan’s request.
This loan can cover your economic gaps as well during the corona catastrophe. You can get your EIDL loan for your small business for further aid. You have to repay this loan in full or in part, depending on SBA procedures. If you are looking for ultimate support for your injured small business express loan is the best idea.
4.SBA debt relief
The SBA will pay all debt’s principles and interests and fees of current and new small business loans for six months. Including 7(a), 504, and microloans issued before September 27th.
Moreover, SBA is providing automatic deferments for your disaster loans through December 31st. Automatic deferments mean that the borrowers will be requested to pay a reduced payment during the corona pandemic. The borrowers who desire to repay their loans regularly can do it without being considered in the deferring program. You have to note that the debt’s principal and interest rate are not canceled. You need to settle your debt regularly after the corona pandemic automatic deferring period. If you wonder whether your loan is eligible for a deferment program or not, contact your loan servicing office.
Coronavirus has caused a significant catastrophe in businesses’ economic status. Small American businesses have been affected by this issue as well. However, the federal government has established several programs to prevent more injuries in small businesses’ financial status. SBA has provided four main plans to aid small businesses to cover their payment and maintain their employees. These programs include paycheck relief protection, EIDL loan, Express loans, and Debt settlement programs for all small businesses all over the united states. If you run a small business and you have financial problems, you can apply for these programs. This may help you to avoid further credit problems in your industry. You have to note that economic issues can affect your business credit negatively and create more critical issues in the future.
If you are not aware of your exact financial status and you can not decide which program well aids your business, you can get free consulting from enrich.com who has a trustworthy history in the business credit field.