Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, President Trump signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
The 2020 CARES Act has two key programs that will help every local business and you need to apply today. Learn more about all types of Funding Options offered by the Small Business Association (SBA).
HOW CAN THIS HELP YOUR BUSINESS?
The US government is giving money to small businesses to lessen the impact of shelter restrictions. Your small business can receive relief funds that you do not have to pay back as well as loans with very favorable terms.
WHAT YOU NEED TO DO ASAP
1) Apply for an Economic Injury Disaster Loan (EIDL) Emergency Advance
Key Points
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Loan program managed by the SBA
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No fees to apply
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Up to $10,000 emergency grant – even if you don’t get a loan
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Up to $2M loan at 3.75%
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Applications are online directly through the SBA
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You need 2019 Revenue and COGS (cost of goods)
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2) Apply for the Paycheck Protection Program (PPP)
Key Points
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Loan program managed by local banks so you’ll work with your business’ bank
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If your bank is not participating in PPP, Towny can help – contact us
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No fees to apply
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Bank will require verification of your payroll (W2’s, etc)
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Last 12 months of W2s & a W3
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Up to 2.5x monthly payroll grant – (free money)
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Loan amounts will not be forgiven at 1% for 2 years
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Contact your business’ bank for Application Forms
Experiences & Insights From Other Businesses
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There are 2 programs you SHOULD APPLY FOR NOW!
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Economic Injury Disaster Loan (EIDL) Emergency Advance
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Paycheck Protection Program (PPP)
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There are NO FEES to pay to apply for either of these programs.
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ALL SMALL BUSINESSES should APPLY FOR BOTH PROGRAMS NOW.
PPP – Payroll Protection Program
This is technically a loan, BUT whatever portion of that money you use for payroll, rent and utilities, that part of the loan can be forgiven, tax-free.
What money you don’t use for those specific reasons will need to be paid back over a 2 year period…but the INTEREST rate on that money is ONLY 1%.
To know what number you need to insert into avg. monthly salary paid, you will need to get your copies of the W2s you issued to employees. NOTE: If the employee was paid more than $100,000, you must cap their comp at $100k. See below for quick tips to filling out the PPP Application
1) Be sure to subtract the FED TAXES you paid on employees.
2) To get avg. monthly: Take the total you paid out last year and divide by 12.
2b) Use this number to insert on monthly avg on the app
3) Multiply the avg number times 2.5 to get number you need for the total amount you are requesting on app
With this simple application and copies of your Business’ W2, you can submit your paperwork to your SBA lender (your bank or credit union) and again there are NO FEES to apply.
IF YOUR BANK OR CREDIT UNION IS NOT PROVIDING PPP FUNDS, LET US KNOW AND WE WILL HELP FIND A LOCAL BANK TO SUPPORT YOU.
AGAIN… YOU PAY NO FEES TO ANYONE FOR THESE SERVICES/FUNDS.
Economic Injury Disaster Loan (EIDL) Emergency Advance
This program needs to be submitted directly to SBA, not your bank.
This is a LOAN. Again, the application is very simple. The only information you will have to provide that you may not know off the top of your head is your total sales for 2019 and your total COGS. (cost of goods)
After you submit the application, you will be contacted from SBA for additional underwriting and details.
The SBA advises that all businesses should “apply as quickly as you can because there is a funding cap.”
WHY? Even if the SBA declines to approve your business for a loan, you may still receive up to $10,000 as emergency funds that do not have to be paid back.
Planning for What’s Next…
Communicating with your customers is critical during this shut down we are enduring. Texting and vocal communication have become more essential and valuable than ever and you can leverage these technologies effortlessly with Towny’s Coalition Marketing Platform.
Building a relationship with your customers is THE KEY to building a LOYAL base. Now is the time to reach out to your customers…not to sell them, but to encourage them and let them know you appreciate them.
If you want to learn more about communicating with your clients, SBA Lending, or Towny simply send us a note at support@towny.com or book a quick appointment and we’ll call you when you’re free.