How Businesses Can Apply for $10,000 Today and Cover Payroll for Two Months
Businesses that take advantage of the financial assistance available to them and retain their employees will be in a better strategic position as we move into recovery.
I just wrapped up a meeting with a number of business leaders in our local community. One of the things we discussed is how many businesses are overwhelmed at this time and they’re missing out on all the opportunities that are right in front of them. It was also shared that there’s a lot of misinformation around the CARES Act, including the Economic Injury Disaster Loan (EIDL), as well as the Paycheck Protection Program.
While I am by no means an expert (no one really is as this is so new) on these programs, I have done my fair share of research and will provide you with a condensed version that outlines what your top two priorities should be right now. I’m going to walk you through them and show you how to apply for the $10,000 Emergency Advance today, so you can get cash quickly to continue business operations. Then I will walk you through the Paycheck Protection Program and show you how you can get a forgivable loan to cover your payroll and other expenses for the next couple months. Yes, it can really be forgiven. More information on that below.
Here are the two main priorities for SMB’s as I see them in regards to the benefits from the CARES Act.
Priority #1: Apply for the $10,000 Economic Injury Disaster Loan (EIDL) today!!! There is a checkbox to click to say you would like the $10,000 emergency advance that you don’t have to pay back as long as use it for approved expenses (payroll, rent, etc.).
Apply here (it takes 15-20 minutes): Here is the link to the rapid approval process – https://covid19relief.sba.gov/#/. You can find more information on the SBA website regarding the loan here: sba.gov/disaster.
I would apply quickly as there’s a limit to how much they’re paying and there’s a lot of organizations that qualify. While the application is applying for a loan (EIDL – Economic Injury Disaster Loan), you don’t have to take the loan. Just check the box for the $10,000 emergency advance. It says you will receive the funds in your account within three days.
Priority #2: Review the Paycheck Protection Program (PPP) to understand how it could benefit your business and pay for your employees payroll among other expenses to get you through this challenging time. This is a forgivable loan for 2.5 times your average monthly payroll expenses. The application is supposed to be available Friday (4/03) and it will be done through your local banks/credit unions (that are SBA lenders). I would recommend reaching out to your preferred institution and ask them how the process will work.
The treasury and SBA just put up this documentation on it and here is the Paycheck Protection Program Loan Application. To reiterate, this is done through your bank, so you should ask them if they’ll have an online application as that should be faster. There’s also more information on the SBA website.
You should be aware that if you received an EIDL loan, you could potentially refinance it into the PPP for loan forgiveness purposes. You are not able to have an EIDL loan and a PPP loan simultaneously for the same purposes, based on my understanding. If you said no to the loan or didn’t get approved, but received the $10,000 EIDL grant award that amount would be deducted against the amount that is forgivable under the PPP loan.
I hope this helps. Please let me know if you have any questions!
Compiling a list here shortly! Comment if you have something we should add.
- SBA: https://www.sba.gov/disaster
- Economic Injury Disaster Loan application link: https://covid19relief.sba.gov/#/
- Paycheck Protection Program: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
- U.S. Treasury CARES Act: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
- Comprehensive list of the steps businesses should take during COVID-19 by Horenstein Law Group
*Disclaimer: I am not a tax expert, an attorney, or a CPA. One should consult these professionals and review all the options to determine which programs may be best for them and their unique situation.