FACEBOOK LIVE EVENT THIS WEEK
Please join me for my Facebook Live event
Tuesday 1pm EDT/10am PDT
Update on PPP, financing, and strategies to help your business survive. Go here to join or to watch later.
And if someone forwarded you this newsletter, you should sign up here.
PPP – HOW CAN I GET THE MONEY?
Monday morning, 10:30 am EDT, the SBA will once again start accepting applications for the Paycheck Protection Program forgiveable loans (PPP). That means banks can send in their back-logged applications as well as new ones. Keep in mind: YOU do NOT apply to the SBA—you apply through banks and other lenders.
Good news/good news/bad news
- Good news: Last week Congress added $310 billion to the PPP. The original $349 billion ran out of money in just a few short days.
- Good news: If you applied through a bank before money ran out and hadn’t received your loan yet, you’re almost certainly already in the bank’s system and your application will be re-submitted. You’ll be closer to the front of the line this time! (Assuming all your documents were in order.)
- Bad news: The reality is if you haven’t already applied through your bank, you’re going to have a really hard time getting the funds. Most banks have huge numbers of applications they’ve already received which they will likely submit before new applications. In fact, they are supposed to take applications on a first come/first served basis.
Whatever you do, do it fast! The head of a major banking organization predicts funds will run out within 48-72 hours.
Here’s what you need to know:
- The key: apply fast and apply often. Even if you’ve already applied, until you’ve received notice that your application was accepted by the SBA (a notice that will come from your bank), you can still apply to other lenders. Do so. Do it today.
- Try community banks and credit unions. Many small businesses reported more success in getting PPP loans through local, community banks and credit unions than the big national banks. Think if you know anyone who works at a community bank—and call them. Look at websites of community banks serving your city, state, region.
- Try new lenders. Here are three new-ish lenders to try:
- Paypal (for merchants)
- Square (for existing and new customers)
- Intuit (for Quickbooks and TurboTax self-employed customers)
- Be cautious with alternative lenders. A number of “fintech” companies are offering help with PPP loans. They’re mostly shopping your application to banks and will probably have no better luck than you. In the meantime, you’ve given these companies with loan-shark level interest rates and sky-high fees all your information.
Go here for a clumsy tool to search for SBA approved lenders.
EIDL LOANS – MORE MONEY OPTIONS
Last week, Congress also added $60 billion in funds for the Emergency Injury Disaster Loan (EIDL) program. While these loans are NOT FORGIVEABLE, the interest rate is low (3.75% for for-profits; 2.75% for nonprofits) and up to the first $10k can be a grant, depending on how many employees you have ($1k for each, up to 10). Please consider these loans as well, since they may be the lifeline your business needs. Keep in mind that the Covid EIDL loans do NOT require a personal guarantee, meaning you are not putting your home or savings on the line. Apply for the EIDL here.
Upcoming: Look for the following topics in my next updates, arriving in your inbox soon.
- PPP – How do you get the loan forgiven?
- Making money NOW.
- What should I do with employees I’ve put on the payroll even if my business is closed?
- Should you reopen your business even if the government says you can?
- Cash management in crisis times.
- Urging Congress to pass additional help for small businesses.
I will discuss all this further during my Facebook Live session—Tuesday, April 28 at 1pm EDT/10am PDT—and future Facebook Live sessions. Go here to join or to watch later. Learn more in future newsletter updates as well. Sign up at here if you are not already on my mailing list.
Stay well. Stay home. Stay in business.
Copyright Rhonda Abrams, 2020