Help is officially on the way...
On Friday, the U.S. government approved the Coronavirus Aid, Relief, and Economic Security Act, a $2 trillion stimulus package that includes $350 billion in government-backed paycheck protection loans for small businesses.
Eligibility
First, you need to determine whether you’re eligible for any of those $350 billion in loans.
Inc.
staff writer Kevin J. Ryan dove into specifics on loan eligibility, and wrote a very helpful primer on the subject. A couple topline tidbits:
If you have fewer than 500 employees, operate in the food or accommodations industries, or run a nonprofit or veterans' organization, your odds are good.
The maximum value of the loan you might obtain is based on your average monthly payroll cost in 2019, so start calculating those costs right now.
Terms
Second, understand the differences between these loans and the more traditional 7(a) loans you’d ordinarily procure through the Small Business Administration--which range from an increase in maximum loan size (from $5 million to $10 million) to a lower cap on interest rates (from 6 percent to 4 percent). Over the weekend,
Inc.
web producer Brit Morse
assembled an exhaustive list of these differences
--because understanding them could be crucial to your company’s financial health.
Loan Forgiveness
Third, learn about paycheck protection loan forgiveness: Portions of these loans can be converted to grants, dependent on your company’s expenses and whether you conduct layoffs in the first eight weeks following the loan.
Inc.
senior editor Graham Winfrey
dug into the details here
--including how forgiveness affects businesses that have already laid off employees.
Applying
Weisul put together
a four-step guide
to making that significantly easier on yourself--including, crucially, a process for understanding what you actually need from these loans.
