The SBA has substantially streamlined their economic injury relief loan application in response to the inadequacies and unpreparedness of their site for such a wide ranging inundation of businesses scrambling to find assistance. The new process is much simpler and straight forward than the long form application in place less than a week ago. In addition to streamlining the application there is no also a section allowing your business to request a $10,000 SBA loan advance. While the details are not perfectly clear as of yet, it appears that you can receive the advance almost automatically, with few to no questions asked. If your loan application fails to be approved or is denied (or if you decide to decline the loan?), the $10,000 advance appears to take the form of a grant and is simply forgiven. If you choose to accept the loan, under the articles published so far, it appears it is applied to the balance of your loan, at an interest rate not to exceed 4%.
It is important to note that if you applied for Economic relief under the original form created after President Trump issued his decree, you will have to resubmit using the new form. This information was likely already distributed to you via email from the SBA, but if you missed it, get back on the site and get the new form completed as soon as possible. The good news for everyone is the new process is much quicker to fill out and most information is easily gathered from a well maintained Quickbooks profit & loss statement. The one idiosyncrasy does appear that they want data from February 1,2019 through Jan 31, 2020, not a straight calendar year.
In addition to the new streamlined SBA economic injury relief loan process, the US Department of the Treasury has also released its payroll protection program (PPP) website with the initial application available as well as a frequently asked questions page. As an ADP payroll service user, they have generated a custom report available to all of their subscribers which easily generates the information necessary to fill out this application and print the necessary documentation banks are expected to ask for. If you are an ADP subscriber log into your RUNpayroll site, navigate to the reports tab at the top, and look for the heading Payroll is bold letters and at the bottom of the right side column you will see CARES SBA-PPP: Monthly Payroll Cost. Add the lines across the bottom to include your tax liabilities and average this out by dividing by 12 for the 2019 calendar year (the PPP application states 2019, or if you are a new or seasonal firm there are additional instructions). From here, follow the instructions on the *.pdf application provided by the treasury and, voila! You have the information you need.
The more ambiguous portion of this process is when small business owners and entrepreneurs can anticipate banks being able and ready to accept these applications. According to an article published today in the Washington Post titled, “Here’s how to get a small business loan under the $349 billion Coronavirus aid bill.” by Aaron Gregg, the author states, “Treasury Secretary Steven Mnuchin said Monday on Fox Business Network that small business loans will be made available starting Friday.” As of yesterday, the only institution to formally recognize the potential availability of a PPP grant/loan was US Bank. Admittedly the simple contact form was not too reassuring, however if they do indeed reply when the loan process is available it may prove quite helpful.
While it is becoming a common theme. As a small business entrepreneur you have to stay on top of this stuff. If you are not able to do it minute by minute, make sure you do it day-by-day. The situation continues to change rapidly and with resources being finite, it is important to make sure you are grabbing the opportunities as soon as they become available. Two trillion dollars may seem like a lot of money, but don’t forget only $349 billion is earmarked for small business relief. This is going to continue to grow into a bigger and bigger, nationwide problem. The money will dry up quickly.