Free Corona Virus Money for Business Owners!

Disclaimer: The Covid 19 SBA loans are brand spanking new, so the following article is just what I have learned so far in filling out the applications online. I have no idea how many business owners will get approved and if they will receive the money fast. I hope we all receive the money fast!

The Covid 19 Economic Injury Disaster Loan Advance and Paycheck Protection Program are no brainers. Almost every business owner should sign up! Its free money if spent honestly on business expenses.

Here are the two-business owner related programs that appear to be awesome:

Covid 19 Economic Injury Disaster Loan (EIDL) Advance

This online application is completely facilitated through the SBA. The business owner is applying to get $10,000 advance that doesn’t have to be paid if spent on business expenses. This $10k advance is taken into consideration when applying for the other SBA loans.

It takes about 30 minutes to 1 hour to finish this application. The application was surprisingly easy. My guess is the Fed is trying to get super small business owners or 1099 workers the $10,000 free money first and then handle the big loans. I have filled out several of these applications, my favorite part is it asks for your banking account/routing number so the $10k can be direct deposited ? It says the $10k hits within 3 days of a submitted application, but that’s not happening. The bad thing about this advance is $1k is given to the business owner for each currently employed employee up to the $10k. So if the business owner only had one employee, they will only receive $1k.

Paycheck Protection Program (PPP)

The PPP is a very different program from the Covid EIDL Advance. The application for the PPP is filled out on your business bank’s website instead of the SBA website. I would say the application takes 1.5 – 3 hours. It asks for a lot of detailed payroll information. The banks want to see the business owner’s quarterly/annual payroll tax reports, 941’s and 940’s. They want to see print outs from your payroll system such as ADP, Paychex, or QuickBooks Online Payroll. Some of the reports they ask for your payroll summary for the 2019 year and then again as of Feb 15th. A lot of what they ask for they want the reports for these two dates.

The PPP pays 2.5x the business’s average monthly payroll for the last 12 months. For example, if a business on average pays $100,000 per month to all employees, the business could qualify for a $250,000 loan ($100,000 * 2.5 = $250,000.

The amazing thing is this loan is forgiven and does not have to be paid back if spent on real businesses expense. Pretty good deal!

If you would like help filling out these loans or need help pinning down your financials/payroll reports, feel free to give us a call!