Understanding How SBA Programs Can Help Your Business

Many small businesses are struggling to make ends meet during the current pandemic. Suppose you are unable to pay your staff or pay your rent and utilities. In that case, you may be able to qualify for one of these emergency intervention measures offered by the Small Business Administration.  

Paycheck Protection Program

The Paycheck Protection Program is an SBA loan option that can help avoid you keep your employees on the payroll and prevent furloughs. You can apply for this loan through an SBA lender institution, including a bank where you have a business account; however, this affiliation may be waived for certain small businesses, including foodservice businesses and franchises.

You may apply PPP funds toward payroll and benefits, mortgage, rent and utility payments, and you may expect to receive up to two months of your average payroll costs plus an additional 25% of that amount. You may also apply for loan forgiveness as long as you can show that you used the entirety of the loan toward the approved payroll expenses within the eight weeks following your receipt of the loan.

Economic Injury Disaster Loan

Small businesses, including agricultural businesses and non-profits, may apply for this loan to cover operating expenses, including rent and utilities. The loan is payable over thirty years at a fixed rate of 3.75% for businesses and 2.75% for non-profits, with no pre-payment penalty. The maximum amount of this SBA loan is $500,000.00, and companies receiving more than $25,000 must offer collateral.

Shuttered Venues Operators Grant

Small businesses, including non-profits, performances venues, museums and theaters, may be eligible for grants to cover their gross revenues. Companies operating as of January 2019 may receive 45% of their gross income, and those established after January 2019 may receive an amount comparable to their average monthly gross revenue multiplied by six. Grant funds can apply to a wide range of expenses including, payroll, taxes, rent, utilities, mortgages, insurance advertising and contractor payments.

A prior PPP loan may factor into the calculation of a company’s final grant value. Companies that receive these grants must also maintain detailed records for how they use the funds. A business must retain employment records for four subsequent years and all other documents for three successive years after receiving funds.

If your small business is struggling to get back on track because of financial loss during the pandemic, you may be eligible for an SBA loan or grant program to help you get back to business as usual.