Billions of dollars in COVID-19 relief still waiting for small businesses
In an interview with Yahoo! Finance, Isabella Casillas Guzman, the administrator for the Small Business Administration (SBA), said there is still time to capitalize on COVID-19 relief through various programs, including forgivable loans.
The ongoing impact of COVID-19When COVID-19 began sweeping across the country, the U.S. government passed numerous measures to support small businesses. Administered through the SBA, these initiatives have been a lifeline for many companies who were forced to shut down or saw significant declines in revenue.As the Delta variant surges, this left-over funding could be even more critical. Business owners are taking notice of the new variant, and there are concerns that it could derail any advances seen over the past months. A survey of business owners from Alignable, which was referenced in the Yahoo! article, found that 34% of all respondents were “highly concerned” about the Delta variant. According to a recent Snagajob survey, 55% of employers stated that the Delta variant/recent rise in cases has made their staff more concerned about health/safety in the workplace.
Help for small businessesPrograms like the Paycheck Protection Program and Restaurant Revitalization Fund are crucial in supporting business owners and their employees, and there are still billions of dollars remaining. Current in-need businesses simply need to reach out and take advantage of the opportunity.
One of the most significant programs is Economic Injury Disaster Loans. Known as “EIDL,” these loans are for small businesses, nonprofits, and small agricultural cooperatives who have suffered economic loss because of outside circumstances, such as a weather disaster and, of course, the pandemic.
As a business owner, you need to be ready for any challenge; you also need to use any and all resources to maintain a strong foundation through difficult times. This could include the federal government’s EIDL program.
What is the EIDL ProgramThe COVID-19 Economic Injury Disaster Loan program is a system of loans that are delivered to small businesses, helping them stay in operation through difficult times like pandemics and other emergencies. They are generally 30-year loans, and can be for amounts up to $2 million.
They are, at least on face, loans that need to be repaid. However, loan forgiveness is common, although certainly not guaranteed. In the Yahoo! article, Guzman is quoted as saying “we want to see those loans move to forgiveness if they're eligible.
Many business that can apply for forgiveness have notAs of August 19, the SBA has approved more than 3.8 million individual loans through the EIDL program, totaling roughly $259 billion. Congress appropriated $50 billion for the program to support up to $367.1 billion in lending authority.
When the PPP was first opened, more than 340,000 businesses used the tools in the first two weeks alone. For early users of the program, about $2.4 billion in lending was forgiven. However, it seems that applications for loan forgiveness have dipped, even though many people still have the loans.
According to the Forgiveness Platform Lender Submission Metrics, which was last updated on August 15th, for small businesses with loans of $50,000 or less, the application rate for forgiveness is only 44.4%. But the group has the largest number of recipients of PPP loans at 9,009,866.
Of those, only 3,999,158 of these businesses have even submitted for loan forgiveness. This means that more than half of the businesses that could apply and potentially qualify for loan forgiveness have, so far, not done so. As Guzman said, they are looking to forgive the loans, so why not at least try to take advantage of this opportunity. If you are one of these businesses with less than $50K in PPP loans, there is no time like the present to apply!
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