Auto Bodybuilders Advised To Hurry To Claim Millions In COVID-19 SBA Repayable Loans
Trade groups and a US representative this week all urged companies to act quickly and safely Financial assistance from the Small Business Administration to mitigate the economic blow of the response to the COVID-19 coronavirus.
EIDL: get $ 10,000 just by applying
Under the CARES law promulgated on Friday, the Small Business Administration to grant body shops and other businesses an advance of $ 10,000 just to apply for a Economic disaster loan. The government must provide that $ 10,000 in three days.
Even if the agency denies you the larger EIDL loan, you can keep the $ 10,000. If you get the biggest loan, the agency will forgive you for the $ 10,000.
The CARES Act gave the SBA $ 10 billion for economic disaster loans, which works out to 1 million businesses if everyone gets the $ 10,000.
U.S. Representative Earl “Buddy” Carter, R-Ga., Told the audience during a Automotive Service Association press briefing on Tuesday to “go spin” to the SBA for EIDL at the end of the webinar.
$ 10,000 was “just waiting” for you, Carter said. He admitted that the money wasn’t really free – at the end of the day, it’s funded by taxpayer dollars – but if his business needed a loan today, he would take it.
“Apply for the EIDL loan,” Carter said.
“Paycheque Protection Program”
Another CARES Act SBA program will lend a store 2.5 times the average monthly payroll of up to $ 10 million at an interest rate of 0.5%. “Paycheque Protection Program” loans mature in two years and businesses can defer payment for six months.
The SBA will forgive you your first eight weeks of certain expenses paid with these funds – including payroll, rent and mortgage interest – if a bodybuilder kept all his staff at the same salary. He will always cancel part of the “PPP” loan in the event of partial layoffs or salary cuts.
SBA and Treasury Department want these loans to start as early as Friday in participating banks, which will be encouraged to do so. The SBA will pay the banks a commission per loan and guarantee the debt 100%, thereby eliminating any risk to the bank.
“This unprecedented public-private partnership will help small businesses access capital quickly. Our goal is to position lenders as the single point of contact for small businesses – the application, loan processing and disbursement of funds will all be administered at the community level, ”said SBA Administrator Jovita Carranza, in a statement Tuesday. “Speed is the key word; emergency capital requests can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our country’s more than 30 million small businesses and their employees, so that they can continue to be the fuel of our country’s economic engine.
ASB provided a sample PPP form so you know what information you will need to provide. Loans do not require any personal collateral, collateral, or borrower fees.
“This legislation provides for small business retention loans to provide eight weeks of wages and some overhead to keep workers employed,” Treasury Secretary Steven Mnuchin said in a statement. “The Treasury and Small Business Administration expect this program to be up and running by April 3 so businesses can approach a participating SBA 7 (a) lender, bank or credit union,” apply for a loan and be approved the same. daytime. The loans will be canceled as long as the funds are used to keep the employees on the payroll and for certain other expenses. “
The SBA is open to banks outside of participating 7 (a) lenders.
“You can apply through any existing SBA 7 (a) lender or any federally insured depository institution, federally insured credit union, and institution in the farm credit system that participates “, the agency wrote on a PPP loan web page. “Other regulated lenders will be available to provide these loans once they are approved and enrolled in the program. You should check with your local lender to find out if they are participating in the program.
SBA PPP loans are retroactive to Feb. 15, so stores can hire those they’ve made redundant, according to the SBA.
“The Paycheque Protection Program is specially designed to help small businesses keep their workforce employed“the SBA wrote in a press release Tuesday. (Focus is on SBAs.)
The PPP is funded by $ 349 billion, which translates to loans to only about 34,900 companies if everyone hypothetically got $ 10 million.
S Corporation Association advisory board chairman Tom Nichols said on an S-Corp Association call Monday that he couldn’t imagine how the program could be met with just $ 349 billion. (Listen to a similar Monday S-Corp call and check out the presentation slides here.)
Nichols (Meissner Tierney Fisher & Nichols) predicted the amount would be increased after the Small Business Administration hit that limit – but noted that this was only a guess.
For Nichols, that meant “you want to line up … as soon as possible.”
ASA lobbyist Robert Redding Jr. told the ASA webinar on Tuesday that bodybuilders should contact a lender to “start a dialogue.” Lenders are moving forward and “we need to encourage stores to do the same.”
Contact the SBA for the EIDL loan and talk to a banker about the Paycheck Protection Program (PPP) loan, Carter said.
“This is not a bailout,” Carter said of the CARES law. The economic problems weren’t anyone’s fault this time around, he said. He said he had never voted for a $ 2.2 trillion bill before, but “it is necessary”.
“Let our pride go out the window,” ASA general manager Ray Fisher urged auto repairers. Use all resources “so that we have no regrets later,” he said.
You can take the payroll protection loan and the EIDL, according to Carter. You just can’t use both for the same thing, Carter said.
However, companies that take out the PPP loan will not be able to use certain other aids provided for in the bill, such as the possibility of deferring payroll taxes or a separate tax credit for employee retention, according to a slide from the S-Corp Association.
S-Corp Association president Brian Reardon said Monday that businesses and workers will need to determine which metric is best for them.
Companies in difficulty
Small “non-essential” businesses have been forced to shut down entirely by state and local governments, and even “essential” body repair service could wilt as door-to-door orders and declining trade reduce mileage and accidents.
Large body and glass conglomerate in the United States and Canada Boyd Group Services (owner of Gerber) estimated Friday demand had fallen 40 to 50 percent. No. 1 MSO Caliber Collision described a significant drop in volume this week that is expected to continue.
“It’s horrible out there – the stories I hear are just heartbreaking,” wrote supplemental board director Brad Mewes in an email Tuesday. “100% drop in sales, literally overnight. The 3 week logs were gone within days. DRP credentials were disabled in an instant. Everyone is excited about this stimulus bill, but we are in dire financial straits economically. I’ve talked to a bunch of pals in the commercial bank and no one knows what’s going on right now. I was on a call from the White House Emergency Small Business Financing Task Force last week and by their own admission they can’t keep up. For those of you who think this will pass in a few weeks – hang in there… it took China 3 months, and it was with the most drastic restriction on human movement ever.
Small Business Management, March 31, 2020
Automotive Services Association, March 31, 2020
Navigating the economic impact of the COVID-19 coronavirus could be difficult for a repairman. Stores have been encouraged to seek SBA relief. (Vectorios2016 / iStock)
US Representative Buddy Carter, R-Ga. (Provided by Carter’s office)
Small Business Administration Administrator Jovita Carranza is shown. (Provided by SBA)