Don’t give up on your business just yet -The skinny on debt reduction and disaster relief programs.
Every hour of every day, the world is changing and information about our industry and its future is unsettling, but there is assistance out there to keep you and your business going. You can search for Economic Injury Disaster Loan Programs to read about what is available. In general, here's the lowdown on assistance programs to date:
Small Business Loans
If you need immediate cash to offset lost revenue and to keep your business afloat, the U.S. Small Business Administration (SBA) is providing a disaster relief assistance program. The SBA will provide low-interest working capital loans up to $2 million to small businesses. The interest rate is 3.75% for a small business and the payment terms can be extended for 30 years. If you have debt and credit card payments at higher interest rates, it might make sense to take out a small business loan to extend your cash flow. You will need to supply the SBA with recent tax returns, personal financial information and your current debt status. Here’s a broad list of information you’ll need to gather when applying:
· Employee Identification Number
· The date of establishment
· Number of years under current management
· Names and addresses of contacts for Loss Verification Inspection
· Personal information including birth dates, Social Security numbers, phone numbers and ownership percentages for each of the business’ owners
· Additional information will need to be provided if any of the business’ owners own more than a 50% stake in a different business
· Personal financial statements will need to be completed for each owner
· The value of cash, receivables, personal property
· The amount of debts
· The amount of liabilities that you are contingently liable for (i.e. what is the dollar value of loans that you guarantee)
You can apply online at the link below:
Or call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 or 1-800-827-5722 for help. You will get a busy signal but be patient.
Federal and State Income Tax Filing Extensions
The federal tax returns filing deadline has now been extended to July 15, 2020 for both businesses and individuals. States are following suit and extending deadlines as well. This will help with your cash flow if you have taxes due and need some money to pay your operating expenses. If you are owed a refund, do your taxes now and don’t wait until July.
State and Local Small Business Assistance
Check with the National Governors Association to view any state and city specific programs. The sites are changing daily and assistance plans are growing. Programs on the table include help with supply chain disruptions, paid leave tax credits and income support to help companies avoid layoffs.
There are some programs in New York City that apply to businesses in all five boroughs. You have to have been in businesses at least six months and have no tax liabilities, liens or legal judgements against your business in order to qualify for these programs. One is the New York City Employee Retention program which offers small businesses with up to four employees, a grant up to $27,000 to cover 40% of payroll costs for two months. You must show you have 25% loss in revenue due to the coronavirus. The city is also offering the Small Business Continuity Fund, which gives small businesses with fewer than 100 employees a 0% interest loan up to $75,000.
Amazon and Facebook are also stepping up to help small businesses and offering some local neighborhood assistance programs. To see if you qualify, go on their corporate sites.
Bank and Financial Institution Loans
Some banks have initiated loan forgiveness programs for small businesses. Some are offering a 2-3 month payment forgiveness without penalty. The bank will extend your payment due date into the future and extend the loan on the back end by the same amount of time. Others are offering low to no interest refinancing programs. This is on a case by case basis, so the best course of action is to negotiate directly with your financial institution and see what they can do for your business.
There are many assistance programs coming out daily, but beware of scammers and predatory loan companies. Only go to reliable sources like the SBA, your legislators office, and governor or municipal offices. Do your homework - there is help out there if you need it.