BRAC’s March 30 COVID-19 Brief: 5 Tips for Small Business Owners
March 30, 2020
If you closed because of the Governor’s Stay At Home order, but aren’t sure if your business qualifies as essential, call the Louisiana Department of Economic Development to ask at (833) 457-0531 or via email at LEDbiz@la.gov. There are many businesses allowed to remain open, but must do so following safety protocols.
Call your bank and ask for advice. Tell them what’s going on at your business, and ask them if there’s anything out there that can help you.
Call your landlord or mortgage bank and ask if they are offering any temporary relief from owing rent or mortgage payments. Most banks and credit unions are right now, usually it’s case-by-case that they consider when called. Do the same for other creditors.
Go to www.SBA.gov/disaster – The CARES Act passed and was signed into law on March 27. The package includes several provisions for small businesses, including the Paycheck Protection Program (PPP), forgivable loans of up to $10 million, with interest rates no higher than 4%, made directly by private local banks and CDFIs. The loans are forgivable if they are used on payroll and other defined operating expenses in a defined time period. These provisions mean that businesses that have had to furlough or lay people off can rehire those employees and use the PPP to cover payroll. The CARES Act also provides for SBA Economic Injury Disaster Loan Advances of $10,000, which must be delivered to applicants within three days, and which can be rolled into PPP loans. Finally, Economic Injury Disaster Loans (EIDL), available at rates of 3.75% for up to $2 million, were made available prior to the CARES Act’s passage. EIDLs can also be used on payroll and other defined operating expenses, but are not forgivable. It is important to note that while businesses can apply for and receive both a PPP and EIDL, they cannot be used for the same purpose.