Investment

SBA Loans – We are here to help.

Categories: Financial investmentPublished On: April 8th, 2020Comments Off16.1 min read

Betty Shih

What resources are available for small businesses struggling during this COVID-19 Crisis?

No one could have expected a pandemic to hit our global economy the way that it has. At TransGlobal, we are working hard to provide our clients with all the possible resources to help us get through these difficult times. The SBA is offering several relief options for small businesses, which we have outlined below. Please don’t hesitate to contact us with any questions or concerns you may have. We’re here for you.

Option 1: Paycheck Protection Program

As many small businesses nationwide face economic distress due to the COVID-19 crisis, the Small Business Administration (SBA) is offering the Paycheck Protection Program (PPP). The PPP can be used for payroll costs, rent, and utilities by businesses affected by COVID-19. Through this program, the SBA hopes to assist small businesses and non-profit organizations in keeping their employees and overcoming financial hardships during this uncertain time.

You may apply for the Paycheck Protection Program if you are:

Small businesses, including self-employed individuals, sole proprietorships, and independent contractors
Nonprofit organizations under Section 501(c)(3) of IRS Code
Veterans organizations that are tax-exempt under Section 501(c)(19) of the IRS Code
Tribal businesses as described in the Small Business Act, Section 31(b)(2)(c)
A small business with less than 500 employees* (including sole proprietorships, independent contractors and self-employed persons) affected by coronavirus/COVID-19.

*Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
**Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.

Currently, loan amounts will equal 2.5 times a business’s average monthly payroll cost, up to $10 million. The loan will be fully forgiven if at least 75% of the funds are used for payroll costs, and 25% for other business expenses, such as interest on mortgages, rent, and utilities, etc. Loan payments could be deferred up to 12 months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. This loan has a maturity of 2 years and an interest rate of 1%. Find out more information about the program at the SBA website.

Option 2: SBA Economic Injury Disaster Loan (EIDL)

This loan has historically been offered to businesses that have fallen on hard times, such as hurricanes or earthquakes. Now, it is being used to assist businesses that have suffered financially due to COVID-19.

Businesses in designated states or regions may qualify for an economic injury disaster loan of up to $2 million. The financing can be used to overcome revenue losses caused by the ongoing coronavirus.

If your business is in a declared zone, you can apply directly through the SBA’s website. In addition to your online application, you’ll need to provide a financial statement, list of current debts, and most recent tax returns.

In these unprecedented times, we want to offer what help we can. Please don’t hesitate to call us for help or more information about these options. We will continue to keep you updated with the latest financial information and news.