Right now, many companies in our entrepreneurial community are scaling back or re-evaluating their business models. However, federal assistance programs for small business owners are available, such as the Paycheck Protection Program and the Economic Injury Disaster Loan. If you worry about potentially laying off essential company employees, here is what you need to know to be eligible for assistance.
Paycheck Protection Program
The Paycheck Protection Program (PPP) provides more than $300 billion in forgivable loans to businesses trying to keep their staff on during the epidemic. The government will forgive the loans for companies that use it to pay for rent, utilities, and employee wages over their eight-week period. If the loan isn’t forgiven, the program will defer the payments for six months. To qualify, your organization needs to be a nonprofit or a sole proprietorship staffing fewer than 500 employees, or you need to be an independent contractor. Additionally, small businesses in the food service or hotel markets can apply.
Economic Injury Disaster Loan
Currently, the relief bill is expanding the provisions of the Economic Injury Disaster Loans (EIDLs) to help small business owners maintain their companies. The program includes $2 million in financial support but is distributed based on the economic impact the business is suffering. Similar to PPP loans, sole proprietors, independent contractors, and gig workers qualify for this relief package. Note, though, that you can’t use the funding to refinance any preexisting debt or pay dividends. And, loans of $25,000 or less don’t require collateral. The deadline for this program is Dec. 16, so take this time to determine if you need assistance as our economy shifts.
Unfortunately, avoiding the common pitfalls is hard, especially in this unique situation. By working with a seasoned business professional like the ones at Big Results Academy, you’ll sleep worry-free knowing that you and your company are ready for the future. If you’re an AFEUSA member, take advantage of your exclusive discount with Big Results Academy through our membership portal.
Article by Charles Jackson, President of AFEUSA