INDIANAPOLIS — Much needed relief is available to small businesses as the Small Business Administration extends, updates and adds on new programs to give struggling American businesses a hand up during these trying times.
“In Indiana, there is over half-million small businesses, which is over 99% of the businesses that are considered small," explained Stacey Poynter, Indiana’s SBA District Director. “They are the life blood of the economy. We are talking to folks every day, some are beginning that recovery phase, some are still struggling a little bit and we are trying to help them as well. But they are the life blood of the economy and so we are here to support small businesses.”
For small businesses who had a SBA loan not associated with COVID-19 relief, the SBA is helping to make some of the payments on that loan. This is debt relief offered by the SBA for businesses impacted by the pandemic. The SBA had this aid in 2020 and it is back now. This time, it is a little modified but it is an opportunity for the SBA to help make payments for a period of time.
More information on debt relief: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/sba-debt-relief
PAYCHECK PROTECTION PROGRAM - PPP
The Paycheck Protection Program, PPP, has now been extended to May 31. This is a 60-day extension from the original March 31 deadline. The application must be turned into the lender by May 31, the lender will now have until June 30 to return it to the SBA.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll.
“A couple other changes, if you are a self-employed or a Schedule C filer, we have actually changed the calculation on that now,” Poynter said. “So you can use your gross income instead of net profit, which is a significant difference in some cases so your PPP loan could be significantly higher by using the gross income as a Schedule C filer. Also we have extended some eligibility as long as you have not had a financial fraud felony, you will now be eligible for the program. And if you have some student loan debt that has been behind, you will be eligible for the program now.”
Other eligibility changes include all persons that are legal residents here in the United States are eligible for the PPP program now. This is compared to before when applicants must be a US citizen or have a social security number, the SBA changed that to an EIN number. As long as you are legally allowed to be in the United States, you are eligible for the program.
“For those of you who have received a first draw of PPP, you may be eligible for a second draw,” Poynter said. “There are some different stipulations on the second draw from the first draw. And that is also available until May 31.”
According to the SBA, Second Draw PPP loans made to eligible borrowers qualify for full loan forgiveness if during the eight to 24 week covered period following loan disbursement:
- Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- At least 60% of the proceeds are spent on payroll costs
More information on PPP: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program
ECONOMIC INJURY DISASTER LOAN - EIDL
Another big update for small business, the Economic Injury Disaster Loan has new changes effective Tuesday. The Economic Injury Disaster Loan, also known as EIDL, serves to meet financial obligation and operating expenses that could have been met had the “disaster” not occurred. This loan was available before the COVID-19 pandemic, however in response to COVID-19 business losses, small business owners, including agricultural businesses and nonprofit organizations can apply for the COVID-19 EIDL.
“Now instead of being capped at $150,000 dollars on your maximum loan amount, it now goes up to $500,000, so that is a pretty significant change there,” Poynter said. “Also instead of having an economic injury in a six month period of time, we have extended that to a 24-month period time. So again, capped at $500,000, this will be an opportunity to declare 24-months of economic injury instead of six months so it should be a significant change.”
Plus, on the Economic Injury Disaster Loan, if a business received an EIDL in 2020 for 2021 the SBA will be deferring payments until at least 2022. This means no payments this year, 2021, on Economic Injury Disaster Loans, that is COVID related.
If business owners already have a current EIDL, the SBA will contact them directly through email to see if they would like to apply to increase the EIDL amount with the changes put in place.
More information on EIDL: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan
SHUTTERED VENUES OPERATORS GRANT - SVOG
UPDATE:
On Friday, April 23, Poynter released the following statement:
"In response to stakeholder feedback about reopening the Shuttered Venue Operators Grant application this weekend, the application portal will now reopen on Monday, April 26 at 12pm ET. It is SBA’s top priority to deliver on the promise and commitment to provide economic lifelines to these hardest-hit venues as soon as possible. Yet, we understand the challenges they would have experienced with a weekend opening and to ensure the greatest number of businesses can apply for these funds, we decided to reschedule. We remain committed to delivering economic aid to this hard-hit sector quickly and efficiently."
PREVIOUS:
Starting this Thursday, April 8, venues can apply for the Shuttered Venue Operators Grant. This is a new program for the SBA in response to the COVID-19 pandemic restrictions. The SVOG provides emergency assistance for eligible venues affected by the COVID-19 pandemic.
To register for this grant, venue operators must be registered with sam.gov, which is the official way to do business with the federal government.
Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million.
Businesses that could be eligible for the grant include: live venue operators for promoters, theatrical producers, live performing arts organization operators, relevant museum operators, zoos and aquariums who meet specific criteria, motion picture theater operators, and talent representatives. Other requirements include that the business must have been in operation as of February 29, 2020.
Poynter urges business owners to read the Frequently Asked Questions on the SVOG SBA landing page if they are interested in applying for this grant.
The Shuttered Venues Operator Grant came from the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act signed by President Trump on Dec. 27, 2020 with $16-billion total funding available.
More info on the Shuttered Venue Operators Grant: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/shuttered-venue-operators-grant
RESTAURANT REVITALIZATION FUND
According to the SBA’s website, $28.6 billion has been set aside for the new Restaurant Revitalization Fund for industry-focused grants. More information for this grant will be made available on Thursday, April 6 on sba.gov. However, there is not a set date as to when these business owners can apply for that grant funding as of yet.
The Restaurant Revitalization Fund will be administered by the SBA and is part of the American Recovery Act that was signed in March.
Unlike the Shuttered Venues Operators Grant, the Restaurant Revitalization Fund does not require applicants to be register on sam.gov.
For the most updated information, go to sba.gov. The first thing you will see on the website is “Economic Relief,” where you will be directed to all the available economic relief programs. This information is made available in up to 20 different languages and includes a chart to compare the different economic relief options to best assist your small business.
