“After working very long hours in Washington to approve these funds and alleviate the problems entrepreneurs are facing in the midst of this pandemic, I want to make sure that our local businesses know and have the resources to access these benefits… Small businesses are the heart of our community; when you’re hurting, we’re all hurting here in South Florida”, said Mucarsel-Powell.
This comes as the government passes a $2 trillion coronavirus stimulus bill that will give direct payments of $1200 to individual Americans who make up to $75,000 per year and $2400 to couples making up to $150,000, and $500 per child. And importantly, this legislation will support small businesses with $350 billion, with corporations getting $500 billion, hospitals $100 billion, and $150 billion for state and local stimulus funds.
According to Victoria Guerrero, District Director for the U.S. Small Business Administration in South Florida, The SBA is offering designated states that has been declared a disaster working capital loans to small businesses that are suffering substantial economic injury as a result of the coronavirus.
With this Economic Injury Disaster Loan small business owners can request up to $2 million. The interest rate for this particular loan is 3.75 percent and 2.75 percent for private non-profit organisations, with a term of up to 30 years.
“These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales, profits, or expansions”, Guerrero confirmed.
She added that for companies requesting over $25,000 collateral will be required, but was quick to point out that the SBA will not decline a loan for lack of collateral.
Bearing in mind that the following is not an exhaustive list, examples of businesses that can apply include hotels, recreational facilities, charter boats, manufacturers, owners of rental property, restaurants, retailers, souvenir shops, travel agencies, and wholesalers. Importantly, the business has to have a physical presence in the disaster area.
The Economic Injury Disaster Loan fund comes directly from the U.S. Treasury, not through a bank. And, businesses can apply online, through the mail, fax, or email. There is no cost to apply for this particular loan and there is no obligation to take the loan if it is offered, and interest rates would only apply on the part of the loan that the company is utilising, not on the entire loan.
Guerrero also explained that applicants who already have an existing SBA Disaster Loan can still qualify for this particular disaster loan, however they cannot consolidate both loans together.
The application process will require certain financial documents such as recent Federal Income Tax Returns; Schedule of Liabilities; Personal Financial Statement; Tax Information Authorisation; Complete copies including all schedules of the most recent Federal Income Tax Returns for the Principals, General Partners, or Managing Partners; current year-to-date Profit and Loss Statement.
All small businesses are encouraged to apply. And, although the deadline for SBA loans is end December 2020, it’s important to apply as soon as possible. Here are a list of important online links.
Where to apply: www.sba.gov/disaster
For online forms go to: https:/disasterloan.sba.gov/ela/information/paperforms
SBA Customer Service: 1-800-659-2955
Hard of Hearing TTY Service: 1-800-877-8339
Resource Partners are also available to answer questions. You can find a listing at: www.sba.gov/local-assistance
Local SBA Office: sba.gov/southflorida
Email distribution list and local updates: sba.gov/updates
Other financial assistance resources are available through local outlets. Brian Van Hook, Regional Director for the Florida Small Business Development Center at Florida International University manages locally the Florida Emergency Bridge Loan programme, which is activated when there is a disaster, such as COVID-19. These are short-term interest-free loans of up to $50,000 in most cases or higher in special cases.
Specifically, the loan is interest-free for one year. At the one year mark companies must repay in full, or the loan starts incurring interest at 12 percent. The application process is online at: floridadisasterloans.org