WINDOW ROCK, Arizona.
The American Rescue Plan Act, which was enacted last week, invested an additional $ 7.5 billion in the popular Paycheck Protection Program, including expanding eligibility to nonprofits and digital news services.
But time is running out to apply. Applications must be submitted by March 31, when the program expires.
The law (HR 1319) also added an additional $ 15 billion to the COVID-19 economic damage loan program, with $ 5 billion targeted for businesses hardest hit by the pandemic.
The PPP and EIDL, administered by the Small Business Administration, provide economic assistance to help businesses meet their financial obligations that could have been met had the COVID-19 pandemic not occurred.
Eligible small businesses that previously qualified can receive a second PPP loan, but not another EIDL.
However, if a business has already applied for an EIDL loan and has not been approved, they have six months from the date the loan was denied to reapply.
According to the Small Business Administration website, the Biden-Harris administration has made several P3 reforms in an effort to ensure more equitable access to funds, especially for small businesses in underserved communities.
Congress also pledged that the latest round of P3s would reach small businesses that have not received much needed relief, including sole proprietors, independent contractors and self-employed workers.
âThe American Rescue Plan Act allows the SBA to continue to elevate the cornerstones of our communities: mom-and-pop businesses and nonprofits that provide essential services to our daily lives,â said the 12 March Michael Roth, Senior SBA Advisor.
The PPP specifically provides loans to help businesses keep their workers employed during the COVID-19 crisis and borrowers may be eligible for a loan forgiveness.
As of March 7, 7.5 million PPP loans totaling $ 687 billion had been approved by lenders in the United States, including 30,347 in Arizona, 9,170 in New Mexico and 17,389 in Utah .
PPP loans can be made up to $ 10 million and are issued by lenders approved by the SBA. Businesses should apply directly through a qualified lender rather than the SBA.
Although the demographics available on PPP borrowers are limited, the SBA is working to improve this.
Some 27,960 applicants who identified as Native American or Alaskan Native received $ 1.6 billion in P3 loans, although more than two-thirds of all PPP applicants refused to provide personal information, including their affiliation. ethnic.
“I strongly recommend that people keep applying,” Karen Allen, senior director of the Northern Arizona Small Business Administration, told members of the Dineh Chamber of Commerce on Monday.
Depending on a person’s financial situation, the P3 is a loan that can turn into a grant if you follow the wording that at least 60% goes to your payroll, Allen said.
The remaining 40% of PPP loans can be used for operational expenses, such as mortgage, rent, utility costs, software and personal protective equipment, but the main objective of PPP is to cover eight weeks of payroll.
To be forgivable, PPP loans must be spent under strict guidelines and documentation about it must be provided. Otherwise, the repayment will be due by the beneficiary of the loan.
Paid sick leave and employee benefits that fall under salary costs can also be covered by the loan.
However, if a business needs to reduce staff or pay, it will also owe the loan.
The term of a PPP loan is two years, and for any part of the loan that is not canceled, the interest rate will be 1%. No collateral or personal guarantee required.
A second PPP loan of up to $ 2 million is only available for businesses with 300 or fewer employees in operation as of February 15, 2020, who have used up their initial PPP loan and can prove a 25% or more drop in revenue in 2020 due to the impacts of COVID-19.
Similar to the first PPP loan, a second PPP loan to eligible borrowers may be forgiven if the rules and guidelines for forgiveness are followed.
Economic disaster loan
The COVID-19 EIDL of up to $ 2 million is intended to help businesses created on January 31, 2020 with 500 employees or less to cover six months of operational expenses, but the money must be paid back, it doesn’t is therefore not forgivable.
Since last April, the EIDL COVID-19 program has approved 3.7 million applicants for $ 200 billion in loans.
No demographic data is available at this time.
An EIDL can be used to cover personnel costs, employee benefits, fixed debts such as mortgages, rents or leases, accounts payable, etc.
The duration of EIDL loans can be up to 30 years at a rate of 3.75% for companies and 2.75% for associations.
EIDL funds are issued by the US Treasury, and companies can apply directly on the SBA website.
The deadline to apply for a COVID-19 EIDL loan has been extended to December 31, 2021.
Businesses can apply for both PPE and EIDL loans if they need help paying payroll and other operating expenses due to hardship and losses from the pandemic.
The main difference between a PPP loan and an EIDL is that with the PPP, you must spend at least 60% of the loan on personnel costs.
Other American Rescue Plan small business assistance programs administered through the SBA include: $ 28.6 billion for Restaurant Revitalization Fund for Industry-Focused Grants, $ 1.25 billion for the Closed Site Operator Grants Program and $ 100 million to establish community browser pilot programs where funds will be provided to eligible organizations supporting efforts to improve access to assistance programs in the event of COVID-19 pandemic.
“Our nation’s more than 30 million small businesses are the economic engine of this country and, in keeping with the Biden-Harris administration’s focus on fair treatment, the SBA will work tirelessly to ensure that eligible borrowers will have access to this crucial economic aid â. Roth said.