SBA loans give small businesses a lifeline

SBA loans give small businesses a lifeline
April 05 16:25 2020 Print This Article

The Small Business Administration (SBA) launched its Paycheck Protection Program (PPP) Friday, with about 1200 lending institutions processing 13,600 loans with a value of $4.3 billion. Loan payments going to pay rent, mortgage, utilities and payroll will be forgiven. Small businesses, defined as those with fewer than 500 employees, and sole-proprietors may apply Monday. The loans will be available to 1099 contract employees and the self-employed on Friday, April 10. You can access the SBA loan form here.

The PPP and other small business loans totaling $376 billion were authorized by Congress on March 27. President Trump said Saturday that the program was “way ahead of schedule” and vowed to ask Congress to increase funding if necessary. The purpose of the PPP is to keep small businesses open and to keep employees from going on unemployment in the midst of the Coronavirus economic slowdown. South Carolina’s Department of Workforce has had a hard time responding to the claims filed by 96,000 workers in the past two weeks.

Among the requirements for the PPP loans are a copy of the businesses’ most recent tax return and payroll records. The program will cover payroll for eight weeks. No payments are required during the first six months of the loan, but the non-forgivable loan principle must be paid off within two years. Other SBA loan programs include Economic Injury Disaster Loans, Express Bridge Loans and a Debt Relief fund. Applications will be accepted until June 30.

Molly McAdams, who owns the Cosmotique salon in West Ashley, launched her business with an SBA loan and plans to seek relief. Cosmotique and other salons are no longer allowed to provide hair, skin and nail services due to an executive order by Governor Henry McMaster last week. McAdams is able to continue selling health, hair and skin products in her salon. She says that businesses should communicate directly with their banks and seek their assistance when applying for the loans and notes that she has received great assistance from Synovus Bank. Some banks are still adjusting to terms of the PPP and were not prepared to process loans on Friday. Another resource available to business owners is the SCORE program, a network of retired business executives who can help people navigate through the application process.