The Coronavirus hit small businesses hard. As stay-at-home orders tighten across the state, small businesses face an uncertain future. Some have already shut their doors forever. Others struggle daily to remain afloat. If you own a small business in California, you may have new options to help you weather the COVID-19 pandemic. Small businesses can now apply for a Coronavirus relief loan. These loans are part of the $350 billion economic rescue plan enacted by Congress. The Paycheck Protection Program helps support small businesses through the tough economic times we live in. This is sorely needed because more than half of all small businesses have less than a month of a financial cushion. If this sounds familiar, you may find support applying for a Coronavirus relief loan. But can this loan truly help your business survive?
How Much Money Can You Get With a Coronavirus Relief Loan?
Our economy relies heavily on small businesses. In fact, small businesses employ over 58 million people in the United States. That is nearly half of the private sector workforce. In 2014, small businesses contributed $5.9 trillion to the economy. As such, protecting small businesses is good for everyone. The Paycheck Protection Program aims to help keep small businesses afloat during this critical time. But how much will it help your business?
If you own a small business, you can get up to 2.5 times your monthly payroll. You can use your payroll numbers from before the Coronavirus outbreak began. There is a six-month deferral on all repayments and interest rates are set at just 1 percent. Congress hopes that this program helps small businesses stay open during the outbreak and long after.
While this loan may sound like the perfect solution for your business, not all businesses qualify. Fortunately, many small businesses with fewer than 500 employees will qualify for this loan. This includes sole proprietorships and freelancers. It also includes nonprofits. The Small Business Administration guarantees all Coronavirus relief loans. They also offer the prospect of loan forgiveness if business owners use the money to retain workers or hire back laid-off workers.
The loan application process will continue through June. However, business owners should begin filing an application immediately. It is unclear how quickly businesses can collect money from these loans. Some could see money in as little as a day, but our research on this issue suggests that longer delays are to be expected.
It is also unclear whether there is enough money in the program to fully meet the demand. Some financial experts believe that the program would need close to $2.76 trillion in order to pay small businesses. As such, small business owners should consult with a Palo Alto business counseling attorney quickly. Your attorney can review your situation and determine if you qualify for a loan. Your attorney can review your situation and determine if you qualify for a loan. Your lawyer will then walk you through the process and help you get approved as quickly as possible.
Banks have been trying to navigate the CARES Act requirements and the SBA directives on how to implement this program and our research show that banks are giving wildly differing information to borrowers. Businesses will need to work closely with their banks, their accountants and counsel to successfully navigate this Program.
Contact Our Palo Alto Business Counseling Attorney Today
If you have concerns about the Coronavirus and your business, we can help. At Winghart Law Group, Inc., we know that these are trying times for small businesses. The Coronavirus hit small businesses hard and many may find it difficult to stay open. Could a Coronavirus relief loan save your small business? We can help answer that question and more. Call us immediately at (650) 332-2994 or fill out our confidential contact form. We offer remote services during COVID-19 to better assist you through this pandemic. We are here to help you weather the Coronavirus outbreak. Call our Palo Alto business counseling attorneys today for help.