07 Apr A Small Business Owner’s Guide to COVID-19 Loans
UPDATE: On 4/24, an additional $310 billion was allocated to the Paycheck Protection Program (PPP). $30 billion of that is reserved for community-based lenders, small banks and credit unions, and another $30 billion is reserved for mid-sized banks and credit unions. An additional $50 billion was allocated for the Small Business Administration’s emergency disaster loans. The SBA will resume accepting applications for both the PPP and EIDL loans at 10:30 am EDT on 4/27.
Businesses large and small are struggling to withstand COVID-19. Mandatory stay-at-home orders have forced many companies to close their doors and even those that can work remotely are scrambling to reduce expenses. In the past 2 weeks alone, over 22 million people have filed for unemployment, and that number is climbing every day.
This is an unprecedented time, and we’re all sacrificing to keep ourselves, our families, and our communities safe. If your business is experiencing financial hardship due to COVID-19, you’re not alone, and help is out there. Here are just a few resources available to help small businesses through this difficult time:
SBA Economic Injury Disaster Loans (EIDL)
The U.S. Small Business Administration is offering low-interest federal disaster loans to small businesses suffering financially because of COVID-19. These loans are being handed out on a first-come, first-serve basis, so if you are considering applying, you should do so now. This money will go quickly.
When applying, you can request an emergency advance of $10,000, which will be disbursed within three business days of approval and does not need to be repaid. Keep an eye out for the $10,000 grant checkbox, and make sure you check it!
Other things to know about EIDL:
• Funds can be used to pay fixed debts, payroll, accounts payable, etc.
• The interest rate is 3.75% for small businesses and 2.75% for non-profits.
• First payment is not due for a full year.
• Long-term repayment plans are available on a case-by-case basis.
Once you’ve successfully submitted your EIDL application, you will receive a confirmation number. Keep this number in case you need to follow up.
Click here to apply.
Paycheck Protection Program (PPP)
As part of the CARES Act recently passed by Congress, the PPP authorized up to $349 billion in forgivable loans so that small businesses can continue paying their employees during the COVID-19 crisis. According to the SBA, they will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
Other things to know about the PPP:
• Loans are available to businesses with less than 500 employees.
• At least 75% of the forgiven amount must have been used for payroll.
• If full-time headcount declines, or if wages decrease, forgiveness will be reduced.
Applications for the PPP are handled through a lending organization, not the SBA. First, review the application, then contact your bank to see if they’re offering PPP loans. If your bank is not an SBA-authorized lender, you can view a list of alternatives here.
Click here to read the full PPP Fact Sheet.
If you are applying for loans, grants, or other assistance, we recommend opening a new bank account to keep those funds separate from normal operating expenses. Since some amount of the loan(s) may be forgivable, you’ll need to carefully document the money you receive and what you do with it.
As we confront the challenges introduced by the COVID-19 pandemic, your business will need to take advantage of every resource available. Know that BASYS is a resource for your business as well. We’re here to help you reduce expenses and encourage cash flow. For more helpful tips and solutions, visit our COVID-19 Business Resources page.
BASYS Processing as a business partner
Does your current processor understand the unique struggles of your industry? Do they provide great rates and excellent customer service? Are they offering solutions to grow your business and being pro-active about helping you reduce risk and increase your savings? Contact BASYS today to learn more about innovative payment solutions that will save you time and money. We make accepting debit cards and credit cards convenient, safe & affordable.
BASYS Processing features:
– Live operator when you call support – no automated voice systems
– Dedicated Relationship Manager for questions and concerns
– Quick response time for your questions and concerns; you are a priority
– Family owned since our founding in 2002
– A+ BBB rating
– 90% + Customer Retention Rate
– Proactive contact with every merchant to walk through the annual PCI process
– In-house PCI Team to assist with questions and concerns
– Solutions including terminals, virtual terminals, e-commerce, mobile, and point of sale
– EMV compliant products
– Reporting for customer, sales, and inventory management
– Gift and loyalty card programs
– Easy-to-read statements
– Transparent pricing
– Tremendous savings
About BASYS Processing
BASYS Processing provides credit card and debit card processing services, and solutions that include terminals, virtual terminals, e-commerce, mobile, and point-of-sale, customized to fit any need. Banks, associations, and software partners depend on us to strengthen their reputations and relationships with their customers by providing remarkable service paired with ultimate flexibility and pricing. Merchants depend on us to make accepting credit cards and debit cards convenient, safe & affordable. BASYS was founded in 2002 on one philosophy: to take care of our merchants, partners, and employees so they never want to leave. We are dedicated to working one-on-one with our customers to design the perfect solution. BASYS is Personalized Payment Processing.
Learn more at basyspro.com, and connect with us online at: