If your small business has not yet applied or received confirmation of funding for a paycheck protection (PPP) or economic injury disaster (EIDL) loan through the federal CARES Act, the good news is that some help is still within reach. Substantial relief, however, may be several weeks away.
The Small Business Administration (SBA) announced April 15 that the grant and loan programs designed to save America’s small business sector in the wake of the coronavirus pandemic had completely dried up, with no clear directive from Congress as to when additional funds would be available. About 2.5 percent of the $349 billion earmarked for small business loans under the $2 trillion CARES Act has been approved and reserved for North Carolina businesses.
The SBA has stopped accepting new loan applications until additional federal funds are freed up to replenish the programs; a scenario that is likely to play out over the next several weeks as House and Senate lawmakers attempt to negotiate a funding compromise while working remotely, like much of the rest of the nation. SBA officials say loan applications that have already been received, but have not yet been approved, will be reviewed in the order they were received.
Where did the money go? In North Carolina, which ranks 18th in the nation for its share of small business relief funds, the construction, manufacturing, professional and technical services industries are the leading loan receivers at this point. The vast majority received less than $150,000 each, according to data from the North Carolina Bankers Association. Meanwhile, nearly 600,000 North Carolinians have filed for unemployment since the pandemic began; a number that can only go one way–up–as the state’s overburdened systems begin to catch up to the backlog of application filers, many of whom have been trying unsuccessfully to apply for jobless benefits for two weeks or more.
Where does this leave your small business? First, it’s important to know that more federal funds are coming. Despite the political squabbling making headlines, House and Senate leaders know they have little choice when it comes to keeping the small business engine running in order to sufficiently fuel the U.S. economy.
That doesn’t mean you should wait to seek help if your business is at risk today. Talk to your trusted advisors; your banker, accountant, attorney, and your team at Sentinel, among others. Check into any and all opportunities that offer debt and premium forgiveness, tax relief, asset restructuring, and financial assistance programs with favorable terms and conditions.
You may also be eligible for one of the following grant and loan programs still accepting small business applications:
- SBA Express Bridge Loan Program. For small businesses that have already applied for an EIDL loan but have yet to receive an approval, the SBA has launched the Express Bridge Loan program, providing up to $25,000 in advance funds that will repaid in full or in part through any EIDL proceeds awarded later. To find out more and to apply, contact the SBA district office nearest you from the list here.
- SBA Principal and Interest Program. Little mention has been made of the SBA’s largest source of available funding for small businesses, and it’s one that could make all the difference for those that already have an SBA-issued loan. The SBA will pay the principal and interest on your current SBA loans for up to six months, in addition to the principal and interest on any new SBA loans taken out between now and September 27. Contact your SBA lender for more details.
- North Carolina Rapid Recovery Loans. It appears as though The Golden LEAF Foundation is in the process of securing additional funding for its now-depleted small business emergency relief program. Golden LEAF officials said this week that the nonprofit economic development entity would reopen the program to new applications; a good sign that more funds are on the way. Eligible businesses can get loans of up to $50,000 with zero interest and no payments for six months. For more information and to apply, visit the organization’s website here.
- Save Small Business Fund. The U.S. Chamber Foundation will open its new Save Small Business fund to applications starting April 20. The program provides one-time grants of $5,000 for businesses with three-to-20 employees operating in economically distressed communities. To find out more, and to apply, go here.
- SBIR Start-Up Grant. If your business has an idea for a new technology or service with good commercial potential in response to the coronavirus pandemic, the National Science Foundation wants to hear from you. The foundation is providing up to $256,000 in seed capital to select start-ups for research and development through its Small Business Innovation and Research Grant (SBIR) program. The NC Small Business Technology Development Center (NCSBTDC) will host a webinar with complete details on April 23. To apply for the grants visit the website here.