Isabella Casillas Guzman is the administrator of the Small Business Administration. She wants small businesses to be aware of COVID-related funds that are still available.
Small businesses have until the end of the year to secure 0 billion in expiring SBA funds

Time is running out for businesses to get COVID funding from the Small Business Administration. Leaving money on the table? Unfortunately, many are.

The Economic Disaster Loan Program, or EIDL, was created as an offshoot of the agency’s existing disaster loan programs. It is specifically aimed at businesses in disaster areas caused by the COVID-19 pandemic. Since its introduction, billions have been distributed in loans and grants to millions of small businesses.

From Last week, nearly $300 billion in loans and grants have been approved by the SBA. About 282,000 small businesses in Pennsylvania and New Jersey have participated in the programs, receiving about $20 billion in loans and grants since the program began.

But there is more money available. About $100 billion more. So why not apply? “I don’t think we qualify,” a client told me recently. “I just don’t have time to go through the process,” said another.

For me, this is unacceptable.

The thing is, almost every business in the region has been impacted by COVID-19 and likely qualifies for one of these loans. In addition to loans, many businesses in low-income areas are also eligible for grants. If you’re one of these companies and you don’t apply by December 31, you’ve essentially passed up a great opportunity.

So please consider these three things:

The first is that if you are a small business with less than 500 employees, you can probably be approved for a THIS. Loan amounts — thanks to recent changes to the program — can be as high as $2 million (bonds and personal guarantees may be required). The interest rate is 3.75% for for-profit corporations and 2.75% for non-profit corporations, which, considering that most economists believe rates will rise this year to counter inflation, will soon become very attractive. The term of these loans is 30 years. If you do the math, that all adds up to a fixed monthly payment of less than $500 for a $100,000 loan. Not bad is not it ?

The second thing to consider is that the government is practically begging companies to apply. So much so that in September, the The SBA has changed some important rules to encourage more business owners to participate in the program. Among those changes was an increase in the EIDL cap to $2 million, allowing companies to defer initial payments for two years after getting a loan. The funds could also be used to pay off commercial and federal business debts in addition to funding their working capital needs. The agency also simplified the rules for restaurant borrowers.

“We have revamped this essential program,” said SBA Administrator Isabella Casillas Guzman. said in a press release. “Our mission-driven SBA team has worked tirelessly to make the loan review process as user-friendly as possible to ensure that every entrepreneur who needs help can get the capital they need to reopen, recover and rebuild.”

Third, and just as important, be generous subsidies available for the smallest businesses with the greatest needs. For businesses in low-income communities (and you can find out if yours is here), you may be eligible for both an EIDL Targeted Advance and a Supplementary Advance.

The Targeted EIDL Advance program provides funding of up to $10,000 for working capital and other operating expenses that do not have to be reimbursed. If your business can demonstrate a reduction of more than 30% in revenue during an eight-week period beginning March 2, 2020 or later and has fewer than 300 employees, you are likely eligible, and this includes sole proprietors , independent contractors , and private non-profit organizations.

If you have less than 10 employees and can provide proof of a 50% revenue loss during the same period, you may be eligible for an additional $5,000 under the Additional Targeted Advances program of the agency.

Even if you have already received funds through the SBA’s Paycheck Protection Program, Restaurant Revitalization Fund, or Closed Venue Operator Grant, you can still benefit from the EIDL program.

I have advised my clients to review these programs now while there is still time. Many do not realize that they are eligible and that the cost of capital – especially in this inflationary environment – ​​is attractive.

Many other businesses in low-income areas of the Philadelphia area don’t realize that they are also eligible for grants that can fund both payroll and operating cost increases. It’s a shame to leave that money on the table, and the SBA strives to make the application process as easy as possible.

“We know government can be difficult to navigate,” Guzman told me recently. “We try to simplify the lending process because our clients are small businesses that have to wear so many hats and have so many responsibilities and need a team behind them. So I see the SBA as their team and we’re here to support them.

Gene Marks is a Chartered Accountant and owner of Marks Group, a technology and financial management consultancy firm in Bala Cynwyd.

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