Economic Injury Disaster Loans – How to apply
It pains me greatly that our tenants are facing devastating impacts on their businesses due to the COVID-19 crisis. It is my hope that my posts over the last two weeks will help in your recovery.
On Monday, I supplied information regarding the Paycheck Protection Program (PPP) that provides loans to small businesses to pay payroll, rent, interest on mortgages, and utilities during the crisis. A portion of the loan can be forgiven to the extent that at least 75% of the money received is used for payroll in the eight week period after the loan is made. Payroll costs do not include compensation for salaries above $100,000. The amount forgiven is reduced in proportion to a reduction in the number of employees or employee wages. If you decide to apply for a PPP loan, it is important that you act now because there is a funding cap on the amount of loans that will be available. Most small business can apply starting on April 3. Independent contractors and self-employed individuals can apply beginning April 10. Contact your bank for details on their specific program or for a referral to another bank in the event your bank is not an agent for SBA loans. Many banks will offer application for PPP loans online.
Some tenants may be better served by applying for Economic Injury Disaster Loans (EIDL) which can offer an immediate grant of up to $10,000. EIDL loans are applied for directly with the SBA at this site https://covid19relief.sba.gov/#/ . You will need your EIN number, information on each investor in the business and sales figure for the period from February 1, 2019 to January 31, 2020.
Complete regulations for the PPP and EIDL programs are still being formulated. I am providing only a summary of the government loan programs. There are details to be considered and rules to be met when applying for these loans. Consult your attorney, accountant or business advisor before making any decision to pursue loan programs offered as a result of the COVID-19 crisis.
Stay strong and be safe. Michael Habif