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Covid-19  impact

Resources for Small Businesses

There is a lot to sort out with the newly-passed CARES Act  (Coronavirus Aid, Relief and Economic Security).

The two programs of interest to most small businesses are the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).  I’ve got the highlights of these  below, with links to the sites with the complete program information.

In addition, I’ve gathered links to other great resources available to Kansas City area and Women-owned businesses.

Covid-19  impact

Resources for Small Businesses

There is a lot to sort out with the newly-passed CARES Act  (Coronavirus Aid, Relief and Economic Security).

The two programs of interest to most small businesses are the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).  I’ve got the highlights of these  below, with links to the sites with the complete program information.

In addition, I’ve gathered links to other great resources available to Kansas City area and Women-owned businesses.

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!  

Apply through QuickBooks for new round of PPP grants

Intuit/QuickBooks is working with QuickBooks Capital to facilitate loan applications from QuickBooks customers.

In general, you need to be a QuickBooks customer with Online, Desktop version 2019 or newer and running QuickBooks Payroll.  Scheduled for a later release are the apps for Self-Employed and older Desktop versions.

Here’s what you need to know. Not yet a QuickBooks Online customer? Contact me and we’ll get you set up today; get you in queue for this latest round of funding. 

 

Economic Injury Disaster Loan

Apply directly to the SBA for the EIDL Loan and be sure to check the box to get your $10,000 advance, which is essentially a grant.  The advance will not be repaid, even if you decide not to take the loan!  Yes, that’s right. FREE MONEY.

The EIDL is intended to be used to keep your operation running (we call this working capital). This loan is to provide working capital for debt payments, payroll, accounts payable and operating bills.

The SBA decides the amount of your loan based on your financial statements; likely 6 months of fixed costs or 1/2 annual gross profits. Loans are based on the business’ ability to repay, but also on what has been termed a relaxed credit policy.

Terms are 3.75% for small businesses; 2.75% for non-profits.  Up to $25,000 is unsecured, with a maximum loan of $2,000,000.  There is no cost to apply, no loan fees, and no real estate collateral required. You can decline the loan if your situation improves and there is no early payment penalty.

Eligible businesses are those with fewer than 500 employees and a physical location in an impact area (that’s pretty much the whole country).  Businesses that aren’t eligible are those that fall within a classification of agriculture, religious, charitable, or gaming related.

The advice I’ve heard is if you business has been impacted by COVID-19 (and whose hasn’t?), and you’re eligible, APPLY. Applications are open through December, but you should apply now and get that $10,000 to pay your rent, provide sick leave to your employees, or keep your staff employed.

Apply for EIDL Loan 

 

 

Paycheck Protection Program

The PPP is specifically designed to help small businesses keep their workforce employed. The loan is available retroactively from February 15, so employers can rehire their recently laid-off employees through June 30, 2020.

All businesses, including non-profits, Veterans’ organizations, Tribal concerns, sole proprietors, self-employed, gig workers and independent contractors with fewer than 500 employees are eligible.

The loan amount is 2.5 months of payroll and expense (up to $10 million). This covers things like payroll, health care benefits, rent, utilities and debt service. It does not apply to any salary over $100k, however.

The SBA will forgive the portion of the loan that is used in the first 8 weeks following the date of loan origination for payroll, rent, utilities and mortgage interest. That’s right–the government is paying to keep your workers employed and your rent paid for 2 months.

Apply to your local bank for the Paycheck Protection Loan. Most banks have been gearing up to provide these loans to you, which are 100% backed by the SBA.  All of these loans have the following terms: 0.5% interest rate, 2 year maturity, no collateral, no personal guarantees, no borrower or lender fees and a 6 month deferral on your first payment.

 

Express Bridge Loan

There is a third SBA loan program, which is intended to bridge the gap while awaiting your EIDL to come through.  A business applying for the Express Bridge loan doesn’t have to have an SBA loan, but they need to have a relationship –deposits or a loan portfolio with an SBA Express Lender.

Beware of Scams

There is no immediate deadline to apply for the Economic Injury Loans and no cost to apply for these loans. You have access to these funds ONLY through the SBA website (EIDL) or your trusted local banker (PPP).

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!  

Financial Statements Required!

With both of these loan applications, you will be required to provide financial information. Start getting together the last three years of your business’ income tax returns, profit and loss statement and balance sheet.  In addition, the EIDL will require each owner of 20% or more of the company to provide a personal financial statement

I took a look at the new SBA loan application form. It asks for the following information:

  • Gross revenues for the 12 months prior to 1/31/20
  • Cost of Goods Sold (or cost of operations) for 12 months prior to 1/31/20
  • Rental Properties– lost rents due to the COVID-19 impact
  • Years in business, # of employees
  • Ownership information

Non-profits will need to provide additional information about the services they provide and the costs to provide them. Note that loans over $200,000 will likely require even more information and additional analysis.

If you’re like a lot of small business owners and haven’t kept your financial records up to date, we can help.  We can update your Quickbooks or other financial accounting software and prepare the 2019 financial statements that you’ll need for your loan applications. We can even help you with the loan application process.

 

Quickbooks Online Special

Quickbooks Online is now offering 70% off for 3 months.  Their Simple Start option at $8/month is perfect for most small businesses and is worth the small price to get your books up to speed quickly.

Sign up, then invite us as an Accountant user. We will create your chart of accounts, download and code your transactions, and create the financial reports the SBA, banks, and grantors will be looking for.

 

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!  

More resources for the Small Business Owner

In addition to the SBA programs, there’s more financial and other help available to small business owners. I’ve compiled a list of resources to help navigate through this time.

Small businesses are the backbone of this economy.  Together, we will help one another and stand strong to continue with our passion of running our small business.

Resource List

Keep checking back for updates

 

 

Kansas City area resources

KC SourceLink has put together this comprehensive guide to the various resources available by type of business, from artists to manufacturer and everything in between.

  • KC Chamber’s Small Business Guide to the COVID-19 impacts
  • AltCap loan fund for Kansas City businesses — NOT ACCEPTING applications due to high demand

Alternatives to Layoffs

Business Initiatives

Intuit Quickbooks Small Business Relief Initiative

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!

Economic Injury Disaster Loan

Apply directly to the SBA for the EIDL Loan and be sure to check the box to get your $10,000 advance, which is essentially a grant.  The advance will not be repaid, even if you decide not to take the loan!  Yes, that’s right. FREE MONEY.

The EIDL is intended to be used to keep your operation running (we call this working capital). This loan is to provide working capital for debt payments, payroll, accounts payable and operating bills.

The SBA decides the amount of your loan based on your financial statements; likely 6 months of fixed costs or 1/2 annual gross profits. Loans are based on the business’ ability to repay, but also on what has been termed a relaxed credit policy.

Terms are 3.75% for small businesses; 2.75% for non-profits.  Up to $25,000 is unsecured, with a maximum loan of $2,000,000.  There is no cost to apply, no loan fees, and no real estate collateral required. You can decline the loan if your situation improves and there is no early payment penalty.

Eligible businesses are those with fewer than 500 employees and a physical location in an impact area (that’s pretty much the whole country).  Businesses that aren’t eligible are those that fall within a classification of agriculture, religious, charitable, or gaming related.

The advice I’ve heard is if you business has been impacted by COVID-19 (and whose hasn’t?), and you’re eligible, APPLY. Applications are open through December, but you should apply now and get that $10,000 to pay your rent, provide sick leave to your employees, or keep your staff employed.

Apply for EIDL Loan 

 

Paycheck Protection Program

The PPP is specifically designed to help small businesses keep their workforce employed. The loan is available retroactively from February 15, so employers can rehire their recently laid-off employees through June 30, 2020.

All businesses, including non-profits, Veterans’ organizations, Tribal concerns, sole proprietors, self-employed, gig workers and independent contractors with fewer than 500 employees are eligible.

The loan amount is 2.5 months of payroll and expense (up to $10 million). This covers things like payroll, health care benefits, rent, utilities and debt service. It does not apply to any salary over $100k, however.

The SBA will forgive the portion of the loan that is used in the first 8 weeks following the date of loan origination for payroll, rent, utilities and mortgage interest. That’s right–the government is paying to keep your workers employed and your rent paid for 2 months.

Apply to your local bank for the Paycheck Protection Loan. Most banks have been gearing up to provide these loans to you, which are 100% backed by the SBA.  All of these loans have the following terms: 0.5% interest rate, 2 year maturity, no collateral, no personal guarantees, no borrower or lender fees and a 6 month deferral on your first payment.

 

Express Bridge Loan

There is a third SBA loan program, which is intended to bridge the gap while awaiting your EIDL to come through.  A business applying for the Express Bridge loan doesn’t have to have an SBA loan, but they need to have a relationship –deposits or a loan portfolio with an SBA Express Lender.

Beware of Scams

There is no immediate deadline to apply for the Economic Injury Loans and no cost to apply for these loans. You have access to these funds ONLY through the SBA website (EIDL) or your trusted local banker (PPP).

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!

Financial Statements Required!

With both of these loan applications, you will be required to provide financial information. Start getting together the last three years of your business’ income tax returns, profit and loss statement and balance sheet.  In addition, the EIDL will require each owner of 20% or more of the company to provide a personal financial statement

I took a look at the new SBA loan application form. It asks for the following information:

  • Gross revenues for the 12 months prior to 1/31/20
  • Cost of Goods Sold (or cost of operations) for 12 months prior to 1/31/20
  • Rental Properties– lost rents due to the COVID-19 impact
  • Years in business, # of employees
  • Ownership information

Non-profits will need to provide additional information about the services they provide and the costs to provide them. Note that loans over $200,000 will likely require even more information and additional analysis.

If you’re like a lot of small business owners and haven’t kept your financial records up to date, we can help.  We can update your Quickbooks or other financial accounting software and prepare the 2019 financial statements that you’ll need for your loan applications. We can even help you with the loan application process.

 

Quickbooks Online Special

Quickbooks Online is now offering 70% off for 3 months.  Their Simple Start option at $8/month is perfect for most small businesses and is worth the small price to get your books up to speed quickly.

Sign up, then invite us as an Accountant user. We will create your chart of accounts, download and code your transactions, and create the financial reports the SBA, banks, and grantors will be looking for.

 

Get your books ready & apply for disaster relief

Books not up to date or 2019 taxes not filed?  We can help!

More resources for the Small Business Owner

In addition to the SBA programs, there’s more financial and other help available to small business owners. I’ve compiled a list of resources to help navigate through this time.

Small businesses are the backbone of this economy.  Together, we will help one another and stand strong to continue with our passion of running our small business.

Resource List

Keep checking back for updates

 

 

Kansas City area resources

KC SourceLink has put together this comprehensive guide to the various resources available by type of business, from artists to manufacturer and everything in between.

  • KC Chamber’s Small Business Guide to the COVID-19 impacts
  • AltCap loan fund for Kansas City businesses — NOT ACCEPTING applications due to high demand

Alternatives to Layoffs

Business Initiatives

Intuit Quickbooks Small Business Relief Initiative

GB Digital Consulting