Although Coronavirus is a worldwide pandemic, our country is the most affected. Currently, according to Worldometer, there are 700,000+ Coronavirus cases, and over 40,000 reported deaths.

Coronavirus is a flu-like disease that is highly contagious. Its most common symptoms include dry cough, fever, and difficulty in breathing.

Due to this pandemic, many Americans are facing financial difficulties. Most small businesses and companies are on the verge of shutting down.

If you are a small business owner, you may have probably thought of closing your business until th>is disease is contained. This is because you find it difficult to run the business amidst the COVID-19 pandemic. Perhaps you are not getting any more clients or customers. Or, you do not have enough cash to pay your employees.

The good news is that the US Small Business Administration (SBA) has recently rolled out Coronavirus loans. These loans have an extremely low-interest rate. You can take advantage of them to leverage your business during these hard times.

If you have decided to apply for COVID-19 loans, make sure you get in touch with us at the Small Business Loan Advisor. We are here for you when you need us most.

Often, most loan applications do not qualify for various reasons. Some of these reasons >are having incorrect facts and not including pertinent information.

Our expert team of attorneys at Small Business Loan Advisor can help you in the loan application process. We can review your application, advise you whether or not you qualify for a particular loan, and which pandemic loan will be the most suitable for you. With our help, you >can get the funds you deserve to save your business during this dire period.

Eligibility for COVID-19 Loans

Almost all small businesses qualify for Coronavirus loans, including non-profits, veteran groups, tribal groups, independent contractors, freelancers, and sole proprietorships. As a business owner, you will automatically qualify for a COVID-19 loan if you have less than 500 employees. When applying for the Coronavirus loan, you may be required to certify that your business has run into financial difficulties due to the pandemic.

Take note that you will still qualify for a Coronavirus loan even if you have one, two, or more existing SBA loans. But, you cannot exceed the SBA total loan maximums if the value of all your loans is combined.

Unlike other small business loans, the application process for COVID-19 loans isn't time-consuming and requires little information. In fact, you may only be required to fill out a form, which asks you to answer various questions, such as the payroll size of your business and why you need the loan. Notably, most Coronavirus loans don’t require any guarantees or collateral.

Although the application process may seem quite straightforward, you are still bound to make several mistakes that can make you lose out from the loan. For instance, you may give an incorrect answer or fail to appear convincing enough. This is why you must first consult with an expert loan advisor before submitting your application.

How Much Will You Get?

You may receive up to 2 ½ times the total value of your monthly payroll. For instance, if your average monthly payroll was $30,000, you may receive up to $75,000.

Do not worry if you have already dismissed some of your employees. What the SBA will consider is the payroll data of your business before the pandemic occurred. The SBA will include the following when determining the total value of your average monthly payroll:

  • Salary

  • Wages

  • Local and state payroll taxes

  • Commissions

  • Group health insurance premiums

  • Payment of sick, vacation, parental/medical/family leave

  • Retirement contributions payment

Take note that the SBA won’t include federal payroll taxes. It also won't include payroll costs for individuals who make more than $100,000. The SBA will consider the first $100,000, but anything over it will not be considered.

However, different COVID-19 loans have different maximum values that a borrower can get. For instance, the maximum amount that you can receive under the Paycheck Protection Program (PPP) is $10 million. In comparison, you can get up to $2 million if you apply for an Economic Injury Disaster Loan (EIDL).

Generally, COVID-19 loans have a low-interest rate. Congress has already allocated enough funds for this emergency loan program, and it may decide to increase them as time progresses.

Numerous banks and financial institutions are participating in the COVID-19 emergency loan program. If you have successfully applied for the loan, you can get your money from these banks and financial institutions in less than 24 hours.

Generally, you will have a higher chance of receiving the loan more easily and quickly if you already have an existing relationship with the lending bank or financial institution. On the downside, you will have a hard time applying for the loan if you aren't affiliated with any financial institution or bank participating in the emergency loan program.

Are COVID-19 Loans Forgivable?

Yes, Coronavirus loans can be forgiven. However, your business must meet a particular criterion for the loan to be forgiven.

In most instances, for the loan to be forgiven, you must prove that you spent the money on only payroll, mortgage interest, rent, and utilities. If you had spent the money on any other thing, the loan wouldn't be forgiven. Additionally, as per the SBA, at least 75% of the forgiven loan portion should have been utilized for payroll and other employee benefits.

It is most likely that your loan will be partially forgiven. The forgiven loan amount will reduce if you had slashed off a number of your employees or cut a portion of their wages. If you had already dismissed your employees, you could still hire them back for your loan to be forgiven.

The bank or financial institution that granted you the loan will determine how much of it is forgivable. In some situations, you may be required to produce evidence. The bank will assess this evidence and either deny or approve the forgiveness within 60 days. Remember that you will not be required to pay taxes on the forgiven loan amount.

Types of Coronavirus SBA Loans

The SBA offers four types of Coronavirus loans. They include the following:

  • Economic Injury Disaster Loan (EIDL)

  • Emergency Economic Injury Grant

  • Small Business Debt Relief Program

  • Paycheck Protection Program (PPP)

Here is a detailed evaluation of these loans:

  1. Economic Injury Disaster Loan (EIDL)

Currently, this SBA program is on hold due to insufficient funds. However, we expect that the SBA will roll out more money towards this program soon.

The maximum amount that you can receive for an EIDL is $2 million. It will take you around two hours to complete the application process.

According to the SBA, you will not be required to produce evidence of your first-year tax returns when applying for the loan. However, the SBA will first review the tax records of your business before awarding you the loan.

Your credit score will determine whether or not you will receive approval. Also, the SBA won’t require you to prove that you couldn’t obtain credit elsewhere.

The interest rate for this loan is 3.75%, and the payment period may be up to 30 years. There is also a one-year deferred payment period, though interest will start accruing when you receive the loan amount.

The SBA has streamlined the application process for this loan. When applying, you will have to go through the following steps:

  • Disclosure – This section will describe what the loan is, and clarify that the details you give will be utilized to determine your eligibility. Also, you will be warned that if you don’t provide any information requested, the SBA will not process your loan, and you may be charged with perjury if you give false information.

  • Business Information – You will proceed to this section after finishing the disclosure step. You will take too much time to complete this section because it is the longest. You will be required to adduce some details about your business and also provide your income statements.

  • Business Owners Information – You will have to indicate who exactly owns the business. If different individuals own the business, you will be required to provide information about each individual who has a stake of 20% or more. Some of the details that you will be requested to provide are social security numbers, street addresses, birthdates, and citizenship status.

  • Additional information – Here, you may be asked about the criminal history of the owner of the business. Then, you will be prompted to submit your application.

In most states, the deadline for this loan is 16th December 2020. Some other states have extended this deadline to 21st December 2020.

After you have submitted the application, the SBA will assign you a loan officer. This officer will ask you various questions. It is most likely that the SBA will process your application much faster if you fully cooperate with this loan officer.

  1. Emergency Economic Injury Grant

As the term suggests, the Emergency Economic Injury Grant is not a loan, but an advance that you can receive from the SBA, which you won’t repay. The maximum amount that you can get when you apply for the grant is $10,000.

The application process for the Emergency Economic Injury Grant is similar to that for the EIDL. In fact, when applying for the EIDL, you will be prompted to indicate whether you would like to obtain a grant at the final stage before submitting the application.

The SBA will determine the grant amount by considering the number of employees you have, and how many of them make at least $1,000 within one month. If the application process is successful, you will receive the funds within three days.

  1. Small Business Debt Relief Program

If you had already taken an SBA non-disaster loan, you might find it difficult to pay it back, especially during this pandemic. For instance, you may not get enough customers or clients, and therefore incurring losses, rendering you unable to pay back the loan.

Fortunately, the SBA Small Business Debt Relief Program can help you obtain immediate relief to your existing non-disaster loans, particularly microloans, 504, and the 7(a). If you qualify for this program, the SBA will pay your loan payments, including fees and interest, for six months. Take note that you will also be considered eligible for this program if you successfully process and receive a non-disaster SBA loan within six months from when the CARES act was enacted (that is>, from 27th March 2020 to 27th September 2020).

You can receive up to $5 million for a 7(a) loan. This loan package is suitable for business owners who cannot access credit elsewhere and need either long-term or short-term working capital.

The maximum amount of money that you can obtain under the 504 SBA Loan Program is $5.5 million. This loan product is primarily designed for businesses that require finances to purchase fixed assets for modernization or expansion. You can opt for this loan if you are looking for funds to buy machinery, real estate, or buildings.

The SBA Microloan program provides loans to small businesses and not-for-profit organizations to help them expand. The maximum amount that you can receive via the microloan program is $50,000.

Currently, the US Treasury has appropriated $17 billion towards this debt relief program. If you ha>d already agreed with your lender to defer payment, the SBA w>ill start paying the debts within 30 days from when the first payment will be due.

Take note that you aren’t required to apply for this program. This program is automatic, but make sure you consult your lender to know whether the payments have reflected in your borrowing account.

To successfully apply for these non-disaster loans, you will need to consult a reputable business loan expert. This expert will help you know which product is the most suitable for you, and which information you should provide to get the loan.

  1. Paycheck Protection Program (PPP)

Just like the EIDL, this program has been currently placed on hold due to insufficient funds. But, we expect that the US Treasury will allocate more funds towards this program.

The maximum amount of money that you can obtain under the PPP is $10 million. What makes this loan to be really beneficial is that 100% of it can be forgiven if you observe the stipulated guidelines. Also, the PPP loan program offers a deferred payment period of six months.

The application deadline for this loan is 30th June 2020. You can apply for this loan via any participating SBA 7(a) lending banks or financial institutions.

If you already have a relationship with an existing bank or financial institution, you can reach out to them and inquire whether the SBA has enrolled them in the program. Otherwise, you can utilize the PPP Lender Search Tool, found on the official website of the SBA.

You can apply for the PPP loan via the official website of the SBA. There is no other method of applying for this loan. You should know that there are scammers who may convince you that there are different ways of applying for the PPP to steal your identity information.

Take note that you can apply for both a PPP and EIDL loan. However, you cannot utilize funds obtained from both loans for a similar purpose. For instance, if you direct the PPP proceeds towards payroll, you can't also use the EIDL funds for payroll.

Although this program is currently on hold, the US Senate passed a new bill on 21st April that will allocate around $310 billion towards PPP funds. According to the US Department of Treasury, business owners should apply quickly for the PPP funds before they are exhausted.

When applying for the PPP, you will be asked to fill out a form. This form will request basic information from you, such as:

  • The business type

  • The legal name of the business

  • Business taxpayer identification number

  • The physical address, email address, and phone number of the business

  • Average total monthly payroll of the business

  • Amount of loan requested

  • Total number of employees

  • Loan purpose

There are also several Yes/No questions that you will be required to answer. If you had applied for an EIDL, you would have to attach a separate sheet with its application details. Also, there are other documents that you will be required to attach to verify the credibility of your application. These documents include the payroll data and the business’s IRS forms.

What You Need To Do

If you would like to take out one or two of the Coronavirus loans, you must complete the application process as soon as possible. Note that there are over 30 million small businesses in the US, and all of them are competing for these funds.

Also, gather all the required information needed to apply for the loan. Then, you can go online and start the loan application process.

Find a Small Business Loan Advisor Near Me

The primary purpose of COVID-19 loans is to protect US small businesses from running into financial crisis and shutting down because of the pandemic. As a small business owner, you should take advantage of these programs to leverage your business, so you can have a higher chance of bouncing back when the pandemic ends.

However, do not submit your loan application without it being verified by a professional loan advisor. We at the Small Business Loan Advisor are here to help you. We will make sure that your loan application is error-free so that you can get the funds you deserve. Call us today at 888-919-1210 for a free consultation.