How to Apply for a Business Loan for Coronavirus
Coronavirus Business Loan
You had such high hopes for your business at the beginning of the year. Your plans were already laid out and your projects were ready to be implemented. But in the blink of an eye, the world shifted and everything was put to a screeching halt, all because of one deadly virus.
No business saw the coronavirus pandemic coming, so you are not alone in trying to figure out what to do to keep your enterprise running in the midst of a lockdown. Fortunately, the government is offering help to businesses that have been affected by the COVID-19 outbreak. That includes high risk merchant accounts.
The CARES Act
On March 27, 2020, the CARES Act was signed into law by the federal government to help small businesses deal with the effects of the economic disruption brought about by the coronavirus pandemic.
The government authorized $376 billion to be offered as low-interest coronavirus small business loans through the U.S. Small Business Administration (SBA) as part of its disaster loans program.
How To Apply For A Business Loan
With the Paycheck Protection Program (PPP), you are allowed to take out a coronavirus loan of up to $10 million through credit unions and banks. But you’ll only be qualified for this loan if you belong to these categories:
- All types of businesses including veteran’s organizations, non-profit organizations, sole proprietorships, tribal business concerns, independent contractors and self-employed individuals with 500 or lesser employees.
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) with more than one physical location and has a team of less than 500 for each location.
- Businesses with more than 500 employees that meet the SBA employee-based size standards for their industry.
To apply for the coronavirus loan, you have to download the PPP borrower application form through the SBA website to know what documents will be required by your lender. If you’re still looking for a lender, you can ask around for qualified banks and credit unions in your area.
Some entrepreneurs are finding it hard to look for a lender that will accept Paycheck Protection Program loans due to the high volume of applicants. Try with your bank or credit union first because they usually prioritize existing customers.
Under the Paycheck Protection Program, a business that applied for the coronavirus loan will be offered loan forgiveness as long as t uses the loan for qualified expenses and it can maintain payroll for eight weeks with the employees’ normal salary rates.
Due to funds running out, the SBA stopped accepting new PPP loan applications as of April 16. But on April 22, lawmakers started a deal that will allow another $300 billion to be replenished into the loan program to help businesses throughout this pandemic.
If finalized, this additional funding is expected to be available only for 2-3 days. So if you are still planning to apply, make sure to keep tabs on the SBA website for any updates on when the funds will be released so you can submit your application right away.
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