Accessing Money to Keep the Doors Open

As I get older, sometimes it is difficult to find the benefits of aging. One advantage, however, is perspective. If you live long enough, you do experience a lot of things. The current climate of virus-panic is difficult and will be for a while, but we will come out on the other side stronger. Americans always do.

In the meantime, there’s the important matter of protecting our health and trying to keep businesses afloat.

Regarding keeping your small company going, the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loans offer up to $2 million in assistance for a small business. Here’s what we know from a press release this week from the SBA:

  • The SBA is offering states low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Governor Polis just submitted the application for Colorado today. It is anticipated that Colorado will be approved for the loan program within two weeks. We will notify you when that happens.
  • The SBA will make loans available to small businesses and private, non-profit organizations in designated areas of a state to help alleviate economic injury caused by the Coronavirus (COVID-19).
  • SBA’s Office of Disaster Assistance will coordinate with the state’s Governor to submit the request for Economic Injury Disaster Loan assistance.
  • Once a declaration is made for designated areas within a state, the information on the application process for Economic Injury Disaster Loan assistance will be made available to all affected communities.

Regarding eligibility for the loans and the process for applying, the SBA said:

  • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%.
  • SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

Learn more about the SBA’s Coronavirus Disaster Relief Lending here. For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail [email protected] (link sends e-mail).

I sat in on a briefing call from the SBA today. More information is forthcoming. One step you may want to take is to visit the website above, get familiar with the site, sign up for the email alerts, and go here for information about how to apply for a disaster relief loan when Colorado becomes eligible.

One thing that was stressed on the call is that the eligibility criteria for this kind of loan is much more relaxed than for conventional loans. The point being: don’t assume you are not eligible; do your homework.

A few other tips:

  • Stay calm and focused. Assess the situation and your options and develop a set of options and actions. It’s very easy to get distracted by stuff you cannot control. Focus on what you can control.
  • Touch base with your banker. They do not want you to fail and take a big loss. You will hear flexibility and forbearance from most of them and a willingness to work through options.
  • Document what is happening financially to your business or nonprofit. This will be very important when the monies start to flow as explained above. You’ll need to be able to explain how this crisis has financially damaged your business.

One of my favorite quotes is from Dr. Jordan Peterson: “Sacrifice is inevitable, but you get to choose the sacrifice.” In this case we didn’t get to choose this virus-crisis, but we can choose how we respond to it. Control what we can control.