The events of the coronavirus have moved so fast that it’s been hard to keep up. The news of the size and scope of COVID-19 has been grim on a public and economic health level. While you are understandably worried and overwhelmed, there are financial relief options available through the Coronavirus Aid, Relief, and Economic Security Act (CARES) that you should apply for now.
Of The CARES Act’s $2.2 trillion, $350 billion has been allocated to help small businesses, sole proprietors, independent contractors, and self-employed individuals. PPP provides 100% federally guaranteed loans to small businesses, and the loans may be forgiven (not required to be repaid) as long as borrowers keep their payrolls during the pandemic or restore them after. According to the U.S. Small Business Administration (SBA), “The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).”
When you hear the word payroll, you may think PPP won’t apply to you if you don’t have employees. But that’s not the case because, even though you may be a sole proprietor, you are your own employee, which makes you eligible. Check the SBA for specific eligibility requirements.
How to Apply – You can apply through many lenders and institutions, including your bank. If your bank isn’t accepting applications yet, apply through the SBA.
You will be asked to provide your average monthly payroll, and the loan amount is determined by taking your company’s average payroll spanning the last 12 months and multiplying that by 2.5. Ultimately, your total loan will be 2.5 times your average monthly payroll.
Get your applications in as soon as possible because they are being processed on a first come, first served basis.
Think of this as more of a grant than a loan because it does not have to be repaid. EIDLA is available to businesses that are experiencing a temporary loss of revenue and provides an advance of up to $10,000. According to SBA, you are eligible if you are a, “… small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.”
Apply for EIDLA now because the application is simple, and funds can be made available shortly after applying.
If you’re taking a break from the news, I don’t blame you, but check in to see what may be coming down the pike. Congress and the White House are discussing adding more funding for PPP since over 40% of the initial $350 billion has been used, so stay tuned.
The economy is taking a major hit, but you can keep your business afloat by taking advantage of these programs.
To put 40+ years of experience in your corner, call (847) 440-5998 or contact us online today. We can begin with a complimentary, virtual consultation.
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