The SBA recently provided small business with financial resources to sustain payroll, hire back staff, and cover other overhead. These programs were established by the CARES act and implemented by the Small Business Administration with support from the US Department of the Treasury. According to the SBA website, this program officially ended on May 31, 2021.
According to the SBA’s website, “The SBA works with lenders to provide loans to small businesses. The agency doesn’t lend money directly to small business owners. Instead, it sets guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions. The SBA reduces risk for lenders and makes it easier for them to access capital. That makes it easier for small businesses to get loans.” There are many different categories of loans, including guaranteed loans, improvement loans, and microloans. Loans can vary in size from $500 to $5.5 million, per the SBA website, “Get $500 to $5.5 million to fund your business.” The money comes from private lenders; the SBA sets the rules.
The SBA has this tool to see if you can find a lender to offer any SBA-backed funding. Here’s how it works:
- You describe your needs and answer some questions about your business which can take less than five minutes
- You get matched in 2 days who are interested in managing your loan
- You can compare the various lender offers
- You submit the application or applications and apply for the loan
Here are some of the things lenders will want to look at: Your business plan (if you don’t have one, you will need to create one), how much money you want and what you will use it for, your credit history information, your business’s financials, how much experience you have in your industry, and any potential collateral you might possess (i.e. inventory, property, etc).
Existing borrowers of PPP loans may be eligible for loan forgiveness. There are conditions for this which must be met. You must keep your staff and maintain their normal compensation. Loans must be spent on payroll and eligible business expenses, and at least 60% of the loans must be spent on payroll. There are a number of steps to follow to apply for forgiveness, using forms SBA 3508, 3508EZ or 3508S. Specific questions about forgiveness should be addressed to your lender.
The SBA also has a number of other relief options to investigate presently. These include the Shuttered Ventures Grant which generally targets entertainment venues such as theatres, museums, the movies, and so forth. There are also specific programs for Restaurants like the Restaurant Revitalization Fund, which also can help bars. Finally, there are programs to help provide reliefs to nonprofits and small businesses experiencing temporary revenue loss.