This content was originally published by the Longmont Observer and is licensed under a Creative Commons license.
| As a part of the newest federal stimulus package, the CARES Act, there is a new lending program available to small businesses impacted by the COVID-19 crisis. These are potentially forgivable loans and are offered through local lenders. The response team has been working this week on clarifying the language and the process of the loans. These are not SBA Economic Injury Disaster Loans. It is a new program. There is $350 billion available through federal dollars at local lenders who offer these loans. Meet the Payroll Protection ProgramThis is a new lending program offered with the support of federal dollars. They are loans up to $10 million or 2.5x your average monthly payroll cost, whichever is less. The dollars should be used to pay for payroll costs, utilities, mortgage/rent, which qualifies for the loan to be forgiven. You will apply for this loan through a local financial institution, like a bank or credit union. You can view a list of lenders by clicking here who are approved to offer these loans. Based on what we have heard, we would recommend talking with your bank first about these loan programs before visiting another lender. Here's more information about this program: Eligible businesses: All businesses, including charitable non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industriesMaximum loan amount up to $10 million or 2.5x average eligible monthly payroll cost, whichever is less.Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses [mortgage/rent, utilities] in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)All loans under this program will have the following identical features:Interest rate of 0.5%Maturity of 2 yearsFirst payment deferred for six months100% guarantee by SBANo collateralNo personal guaranteesNo borrower or lender fees payable to SBAView the sample application by clicking here. You may view a top-line overview of the program from the US Treasury here. You can view a more detailed fact sheet about the program by clicking here. Applications begin tomorrow, April 3, 2020. Please expect local lenders to be inundated with calls as a result of this program coming online. If you have any questions, you should schedule a consulting session with the SBDC to go over your application. They have an army of trained consultants on-hand to help with the process for Payroll Protection loans and other loan programs. Click here to visit their consulting dashboard » |
| OTHER FUNDING PROGRAMS Verizon Funding ProgramVerizon announced a Small Business Recovery Fund to provide grants up to $10,000. Applications are due April 4th at 11:59pm ET. You can learn more about this program here. Economic Injury Disaster Loans (EIDL)You can apply for an Economic Injury Disaster Loan through the SBA. These are available for both for-profit and non-profit organizations in Colorado. You can learn more about this program, including terms and eligibility, by clicking here. Other FundingVisit our COVID-19 Business Resource Hub to view other funding opportunities, including KIVA 0% interest loans. This Hub is updated daily as new information is created. |
