Crazy Times Indeed!

CRAZY TIMES IN THE USA

We ARE in this together - and there's no doubt many of us are struggling and there’s so much misinformation out there. Small business owners have been hit hard by COVID19 and many have already closed their doors. Restaurants, retail stores, event planners, mom and pops – the list is endless and continues to grow. How do we as business owners know what and whom to believe, what is fake news vs what is real? There are a lot of rumors out there, and so many “bad actors” taking advantage of this situation and of innocent business owners that are starving for help.

As an international lawyer and business strategist, my goal is to bring you the real deal – the truth, which many of us are challenged to handle, but which will hopefully set some records straight. It may not always be pretty, but it will always be accurate (at least as of the moment it is presented since in these crazy times things are changing at an unprecedented rate and facts one day may well be fiction the next, sadly). In any event, there is hope and that is what I am here to share.

So, there’s a brand new Stimulus Bill out there and I would venture to bet that there will be more where that came from. At the moment, $2 Trillion is on the table in the current economic relief package. Here are a few highlights of the current Bill which should soon have final approval:

• $350 Million is being made available to small businesses, including many startups, which are generally defined as businesses with a staff of up to 500 employees, will be eligible for loans through the Small Business Administration (SBA) if they are able to prove that they have been impacted by COVID19. The loan amounts are expected to be up to $10 million per business – and the cool news is that if you have more than one eligible business, you may well qualify for more than one loan!

• Unlike in most cases with SBA loans

• Loan payments may be deferred for up to a year, and business owners may well be able eligible for loan forgiveness beyond this deferral for the portion of the loan that can be proven to be used to cover payroll and other similar obligations during a set time.

So, the news out there is not all bad.

The good - there’s $$ available...

The bad - it’s complicated...

The great – there are resources available to help!

There are well over 30 million small businesses in the U.S., and those small businesses hire a lot of employees – the numbers reflect an average of 2 employees per small business to the tune of almost 60 million total employees, which is a significant proportion of the total employment count in the U.S. So many have already suffered job losses or setbacks and huge revenues losses, and although in many cases it may already be too late, sadly, the fact is that small business owners are finally getting some real help and a potential way to stay afloat from the government.

The Coronavirus Aid, Relief and Economic Security Act (the CARES Act) includes a $350 billion loan program for small businesses, which includes sole proprietors, independent contractors and other self-employed individuals, such as realtors – in other words, all of these usually overlooked businesses are included in the CARES Act, and should be applying for these loans without hesitation.

Uniquely, CARES also waives typical SBA loan requirements that the applicant must prove that credit is not available through other resources, as well as the typical requirement of personal guarantees by the business owner, both of which are very significant and open doors to those that would often fall short if typical SBA requirements were applied.

Below is a chart from CNBC detailing some of the states that have been hit hardest by job losses to date. The statistics are dismal, but they are realities with which Americans have to come to terms:

If the loan is granted and you decide not to use it, there is no penalty. There are also no prepayment penalties if you happen to have a winfall between the time of application and the time of the funds being delivered, or if circumstances change. So, if you are a small business owners, RUN, don’t walk, to submit the application – and the sooner the better so that you get in the queue quickly. The applications can be submitted directly to the government through the SBA website, without having to find a participating financial institution through which to apply at this challenging time.

To find out if your business qualifies for an SBA loan or other governmental or private financing, please contact Lauren Cohen at 866-724-0085 or at [email protected].

e-Council Inc. and Scaleup Enterprise LLC’s websites, newsletters, blog posts and other forms of communication contain general information about legal matters. The information is not legal advice and should not be treated as such. You must not rely on the information on this website as an alternative to legal advice from an attorney or other professional legal services provider. For specific questions about any legal matter please consult with an attorney or other professional services provider.