SBA Covid19 loan vs unemployment
Hi Terry,
Hope this email finds you and yours healthy and safe during these bizarre times.
Wanted to ask you your thoughts about the SBA.GOV Covid19 business loan for small businesses hit hard by the Covid19 outbreak. I am a small business with one employee (myself) and at times I hire independent contractors to help when we go out on jobs. All work has stopped during this outbreak. I have stopped paying myself and have gone on unemployment.
A friend told me to pursue the SBA.GOV loan which he said was kind of like a grant where (if eligible) I can receive up to $10,000 and that the loan would NOT need to be paid back….in essence a grant. It almost seems to good to be true….but I’m sure there are strings attached. Here is a quote from the website:
“In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.”
That last sentence makes me think that this more of a grant then a loan….unless it means that a portion of the loan (the loan advance) is the only portion that does not need to be repaid. Is there something I am missing?
Thanks and stay healthy and safe.
Terry Says
There’s a lot of confusion about if/when the small business loans must be repaid. The first plan — payroll protection — is designed to encourage businesses to keep people on the payroll – -including you!
BUT, these loans are given out by the banks, and they are the experts on the specifics. So apply at your bank and see if you qualify, and if you get money how much must be repaid and when.
AND also apply for self-employed unemployment benefits under the Care Act. Most state websites are not set up to process this new type application yet, so it will likely take a while!
