Facebook Live: tomorrow—Tuesday, April 14, I will be holding a Facebook Live at 1pm EDT/10am PDT to give you updates on funding issues, answer questions, and importantly—discuss how to ensure your business’s survival. PLEASE JOIN ME.
And if someone forwarded you this newsletter, you should sign up at PlanningShop.com.
SMALL BUSINESS/SELF-EMPLOYED SURVIVAL TECHNIQUES
Starting with tomorrow’s Facebook Live, I’m going to begin discussing ways to help your business survive (as well as answering funding questions). Yes, I know the future is uncertain, but I also know there’s a way through to the other side. I’ve seen small businesses survive and thrive through a number of recessions and business cycles, and I can share what you can do now and what you will need to do in the coming months. I want to hear your challenges, concerns, and ideas. Let’s pull through this together.
The good news is that I’m hearing from a number of small businesses that they are getting acceptances of their PPP loan applications, and I believe one business has told me the money has already hit their bank accounts. Overwhelmingly, these acceptances have been from COMMUNITY BANKS—not big nationals.
Still having trouble? Either you have not been able to apply or haven’t heard back about your application. And you need money?
Here’s my advice:
- Check a community bank or credit union. They just have to be an SBA (7a) lender. But many are now applying to provide the PPP loan. Not all of them require you to be an existing customer.
- Keep trying at your bank. As banks get more clarity from the Treasury and SBA, they are re-opening their applications.
- Apply at multiple banks. You don’t have a loan until you sign the paperwork. So apply at any that you can.
Here’s a list compiled a week ago by Zenefits of the PPP status among top SBA lenders.
EIDLs—Remember, you may also want to apply for an Emergency Injury Disaster Loan. Up to $10,000 of this loan MAY be a grant (I’m hearing that the amount may be linked to how many employees you have)—and this loan is NOT forgiveable. But it has a low interest rate, and it may help you get through this difficult time. You can apply for BOTH PPP and EIDL—you just can’t use the funds for the same purpose. Apply for an EIDL here.
A CAUTIONARY WORD ABOUT FINTECH/ALTERNATIVE LENDERS
You may soon see offers of PPP loans from a slew of “alternative” “fintech” lenders. BE CAREFUL. If you’re frustrated with your own bank, you may be tempted to apply to one of these lenders. BE CAREFUL!!!
While the terms of PPP loans are determined by the federal government, these lenders have business models that include sky-high fees and interest rates for borrowers who have any trouble paying off their initial loans. Annual percentage rates average a whopping 94% from these lenders and go as high as 358%.
Let me just say: I would not advise any of my friends or relatives to apply to a ‘fintech’ alternative lender. BE CAREFUL.
Here’s one of my earlier columns warning about some of the issues with fintech companies.
ADDITIONAL PPP MONEY
Congress is debating how to make more money available to the PPP program, and I will give you an update tomorrow—in my Facebook Live event and in future email updates.
GOOD THINGS HAPPEN WHEN YOU ATTEND MY FACEBOOK LIVE EVENTS
I was quoted for this ABC News story on the PPP isssues. I also forwarded, with permission, the name/story of one participant from my Facebook Live events who featured prominently in the story.
I will discuss all this further during my Facebook Live session tomorrow, Tuesday, April 14, 1pm EDT/10am PDT and in future email updates. Go here to join or to watch later—sign up at PlanningShop.com if you are not already on my mailing list.
Stay well. Stay home. Stay in business.
Copyright Rhonda Abrams, 2020