Chamber Chat: PPP and EIDL funds are still available
Federal economic recovery money is still available for businesses impacted by the COVID-19 pandemic. The U.S. Small Business Administration (SBA) expanded the eligibility and conditions for loans required to help small businesses recover from the economic shutdown.
The Economic Injury Disaster Loan (EIDL) is again open to all qualifying small businesses after a short restriction to just agricultural businesses. The program offers up to a $10,000 forgivable advance ($1000 per employee) and loan rates of 3.75% for businesses and 2.75% for non-profits.
The repayment for EIDL money is deferred for one year and offers up to a 30-year term. Application processing times vary but from many accounts the advance money typically is approved in a few weeks followed by the loan application offer which follows shortly after. Application for EIDL is applied for online at www.sba.org.
Another program provided by the SBA, available until June 30, is the Payroll Protection Program (PPP) which needs to be applied for through a qualified SBA financial lender, such as an approved bank or credit union. Although online applications can be submitted through business like QuickBooks, Kabbage or PayPal.
The intent of the PPP is to provide payroll relief for business to retain or bring back employees that have been affected by the shutdown. This program has seen the most changes after revised legislation went into effect on June 5.
The original requirement was that 75% of the loan needed to be used toward providing payroll relief within an 8-week period from when the loan originated. The revised legislation reduced the amount to be used for payroll to 60% and extending the time period to 24-weeks for the money to be spent.
Provided that the money is used as required the PPP loan is eligible for forgiveness. If any money that doesn’t not meet the qualification for forgiveness, the loan has a deferral period of 10 months before repayment is required at a 1% interest rate. Just to emphasis the deadline to apply for a PPP is June 30.
According to the SBA, to date the Payroll Protection Program has distributed over $500 billion dollars to more than 4.5 million businesses across the United States. If anyone has questions regarding their eligibility or how to go about finding a qualified SBA financial lender please contact Greater Ishpeming-Negaunee Chamber of Commerce. We have multiple chamber members who we can direct you to.
Our office is back open to the public Monday-Friday, 9 a.m.-5 p.m. We are still working short staffed and will be out from time to time on chamber business. Please call ahead at 906-486-1111 or email firstname.lastname@example.org.
EDITOR’S NOTE: Bob Hendrickson is the executive director of the GINCC. He currently resides in Negaunee with his wife, Laura, and daughter, Sierra. He enjoys mountain biking, skiing, fishing and hunting along with family time.