How to Apply for an SBA Loan_FI

How to Apply for an SBA Loan

On March 27th 2020, the U.S. Government officially passed a $2 Trillion COVID-19 Stimulus Bill designed to support businesses and individuals as Americans everywhere deal with the economic aftermath of the virus.

Many Spotio customers and prospects will qualify for funding to help them stay in business. We strongly encourage those that qualify for various types of funding to apply for it. Outlined below are the different types of funding and resources available to you to survive or thrive as a business.

Guides and Resources

The Small Business Owners Guide to the CARES Act
U.S. Chamber of Commerce Infographic 

Details of Help Available Below (content organized by Aldrich Capital Partners)

Paycheck Protection Program (PPP)

100% federally guaranteed loans will be made available to businesses of fewer than 500 employees (higher for certain industries) who maintain their payroll during this emergency to cover payroll costs, continuation of group health care benefits, employee salaries, commissions, mortgage payments, rent, utilities and interest on any other debt obligations for the period February 15, 2020, through June 30, 2020. 

Key Highlights:

– Loan for up to 250% of monthly payroll, not to exceed $10 million
– Up to 8 weeks of payroll covered
– Forgiveness of these loans is available, if conditions met
– Loans are capped at 4% interest; 10 year loan period
– Work through an approved SBA lender. To apply, use the SBA Lender match here.
PPP FAQ’s for Small Businesses

Economic Injury Disaster Loans (EIDL)

The Small Business Administration (SBA) has issued disaster declarations for every state, allowing small businesses nationwide to access additional emergency funding under its existing EIDL program with more lenient requirements. 

This program provides loans to cover costs that would have been payable by the applicant had the disaster not occurred. Additionally, a new SBA Economic Injury Emergency Grant Program has been created to provide an emergency advance of up to $10,000 within three days of applying for an EIDL. 

Key Highlights:

– Loans up to $2 million
– 3.75% fixed interest rate
– Repayment over 30 years with principal and interest deferment for up to four years
– Elimination of personal guarantees for loans under $200K & requirement that business is in operation for 1 year

Apply for an EIDL loan through the SBA website here.

Employee Retention Payroll Tax Credit

A payroll tax credit against eligible payroll taxes for businesses affected by COVID-19, to encourage employee retention. This ‘retention tax credit’ is for eligible employers that continue to pay employee wages while their operations remain fully or partially suspended as a result of specific COVID-19-related government orders. 

Key Highlights:

Tax credit of 50% of the wages paid to each employee for each calendar quarter.

Credit is available if gross receipts declined by > 50% vs same quarter in the prior year OR if operations were fully or partially suspended due to a COVID-19 related shut-down order from an appropriate governmental authority.

Overall limit on wages per employee of $10,000.

Deferral of Employer Payroll Tax Payments

Employers and self-employed individuals may defer certain payroll taxes. 

Key Highlights:

Deferral amount equal to employer share (6.2%) of the Social Security tax on wages through the end of 2020.

50% of deferred payments due by December 31, 2021; remaining portion due by December 31, 2022.

Net Operating Loss/Excess Business Loss Changes

Modifications to net operating losses (NOLs) and its limitations on losses provided under the 2017 Tax Cuts and Jobs Act. 

Key Highlights:

2018-2020 NOLs fully deductible.

2018-2020 NOLs allowed to be carried back five years to allow businesses to claim refunds of taxes paid in prior years.

Owners of pass-through entities no longer subject to excess business loss provisions for 2018-2020 – able to take full advantage of pass-through      losses, as available.

Business Interest Deduction

Increase in the allowable deduction of business interest from levels defined in the 2017 Tax Cuts and Jobs Act. 

Key Highlights:

– 50% of taxable income now allowable for deduction – up from 30% limitation

For additional links to available resources, please visit:

US Chamber of Commerce
Small Business Administration (SBA) Disaster Assistance
SBA Small Business Criteria
Full Bill available here
Business Guidance and Loan Resources

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