2020_ADN_V5_No3_web

NITTY
GRITTY
Where’s
the Money?
U.S. Small Business Administration
P.L. 116-136 – Sec. 15010/15011
Plan for Use of Covered Funds
If you feel like you’re floating out to
sea, lost in a fog with money worries,
and Covid-based nightmares, there are
lifelines available, both financial and
advisory, for small businesses. But with so
many different platforms, and deadlines,
and red tape, it can be challenging to
know what opportunities are right for you
and your business. Here is a breakdown
of the various funding options, offered by
the Small Business Administration (SBA).
WHAT’S AN EIDL?
An EIDL stands for Economic
Injury Disaster Loan. On June 15, the
Small Business Administration resumed
accepting new EIDL applications from
all eligible small businesses. EIDL
proceeds can be used to cover a wide
array of working capital and normal
operating expenses, such as continuation
to health care benefits, rent, utilities, and
fixed debt payments.
Small business owners and qualified
agricultural businesses in all U.S. states
and territories are currently eligible
to apply for a low-interest loan due to
Coronavirus (COVID-19).
The SBA EIDL direct loan program
is administered by SBA’s Office of
Disaster Assistance (ODA), and offers
long-term, low-interest loans to eligible
small businesses, private non-profit organizations,
and agricultural businesses
that have suffered substantial economic
injury as a result of a declared disaster.
SBA has issued COVID-19 disaster
declarations for all U.S. states and territories.
Eligible applicants must apply
directly to SBA using the online SBA
COVID-19 EIDL portal (available at
sba.gov/funding-programs/disasterassistance/coronavirus-covid-19).
For the
COVID-19 disaster, Section 1110 of the
Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) (P.L. 116-136)
authorized SBA to provide advances of
up to $10,000 to applicants that applied
for COVID-19 EIDL loans and self-certified
as to eligibility, while the applicants
await processing of their EIDL loan
applications. The COVID-19 EIDL
advance is a grant that must be used for
general business purposes.
When SBA disburses an EIDL
advance or an EIDL loan to an applicant
or borrower, all proceeds are
deposited ONLY into the verified
Financial Institution account belonging
to the eligible applicant or borrower.
For purposes of the EIDL program, a
verified Financial Institution account is
a depository institution account using the
Employer Identification Number (EIN)
or Social Security Number (SSN) entered
by the applicant or borrower in the EIDL
loan application. No third-party service
provider is authorized by SBA to receive
EIDL advance or EIDL loan funds on
behalf of an applicant or borrower.
As of August 24, 2020, 3,573,856
loans have been approved have been
approved across the United States
totaling $188,022,021,024.
Each applicant must review and
check all the following (If Applicant
is unable to check all of the following,
applicant is not an eligible entity):
✔ Applicant is not engaged in any
illegal activity (as defined by
Federal guidelines).
✔ No principal of the Applicant
with a 50 percent or greater
ownership interest is more than
sixty (60) days delinquent on
child support obligations.
✔ Applicant does not present
live performances of a prurient
sexual nature or derive directly
or indirectly more than de
minimis gross revenue through
the sale of products or services,
or the presentation of any
depictions or displays, of a
prurient sexual nature.
U.S. SMALL BUSINESS ADMINISTRATION P.L. 116-136 – SEC. 15010/15011 PLAN FOR USE OF COVERED FUNDS
SBA Program
Economic Injury Disaster Loan
Emergency Advance (EIDL)
Grants
P.L. 116-136, Sec 1107, Sec 1110
P.L 116-139, Division B Title II
Entrepreneurial Assistance -
Small Business Development
Centers
P.L. 116-136, Sec 1103, Sec 1107
Entrepreneurial Assistance -
Women's Business Ownership
Assistance
P.L. 116-136, Sec 1103, Sec 1107
Entrepreneurial Assistance -
Centralized HUB FOR COVID-19
P.L. 116-136, Sec 1103, Sec 1107
Subsidy for Paycheck Protection
Program
P.L. 116-136, Sec 1102, Sec 1106,
Sec 1107
P.L 116-139, Sec 101(a)
CARES Act Debt Relief
P.L. 116-136, Sec 1107, Sec 1112
Subsidy for Coronavirus Disaster
Assistance Loans
P.L 116-139, Division B Title II
Salaries and Expenses
Administrative Funding
P.L. 116-136, Sec 1107
P.L. 116-139, Division B Title II
Disaster Administrative Funding
P.L. 116-123, Title II
P.L. 116-136, Title V
Office of the Inspector General
P.L. 116-136, Sec 1107
Covered Fund
(in Millions)
Type of
program
$20,000 Grant
program
$192 Grant
program
$48 Grant
program
$25 Grant
program
✔ Applicant does not derive more
than one-third of gross annual
revenue from legal gambling
activities.
✔ Applicant is not in the business
of lobbying.
✔ Applicant cannot be a state,
local, or municipal government
entity and cannot be a member
of Congress.
Purpose and Use of Covered Funds
In response to the Coronavirus (COVID-19) pandemic,
small business owners in all US states, Washington, DC
and territories are eligible to apply for an Economic Injury
Disaster Loan Advance of up to $10,000. This advance will
provide economic relief to businesses that are currently
experiencing a temporary loss of revenue.
To provide management counseling, training, and
technical assistance to the small business community
through a network of Small Business Development
Centers (SBDCs).
To fund private, nonprofit organizations to assist, through
training and counseling, small business concerns owned
and controlled by women, and to remove, in so far as
possible, the discriminatory barriers that are encountered
by women in accessing capital and promoting their
businesses.
To establish an online platform that provides small
businesses with access to a consolidation of COVID-19
related information and resources from multiple federal
agencies that incorporates an online training program to
educate SBA’s Resource Partners.
U.S. Small Business Administration
$670,000 Guarantee The Paycheck Protection Program was established by the
P.L. 116-136 – Sec. 15010/15011
Loan program CARES Act. The Paycheck Protection Program is a loan
Plan for Use of Covered designed Funds to provide a direct incentive for small businesses
to keep their workers on the payroll. The effective period
is any from covered February mortgage 15 to June obligation, 30, 2020. any The payment program on any is
implemented covered rent obligation, by the Small or Business any covered Administration utility payment. with
support from the Department of the Treasury. This
program PPP lending provides authority small at businesses the current with subsidy funds rate to is pay $652
payroll billion and costs excludes including 7(a) benefits. program Funds authority can also also be included used to
pay in the interest CARES on Act. mortgages, rent, and utilities.
$17,000 Loan
During As part the of the period coronavirus beginning debt on relief February efforts, 15, 2020, the SBA and pays
payments ending 6 months on of December principal, 31, interest, 2020, the and amount any associated of loan fees
forgiveness that borrowers under owe this for section all current will be 7(a), determined 504, and without
regard Microloans to a proportional in regular servicing reduction status in the as well number as new of fulltime
7(a),
504, and equivalent Microloans employees disbursed if an prior eligible to September recipient, in 27, good
faith, 2020. is able to document the inability to rehire or return
to the same level of business activity as prior to February
$50,000 Direct Loan SBA is offering disaster designated states and territories
15, 2020 due to safety requirements related to COVID-19.
program low-interest federal disaster loans for working capital to
SBA will forgive loans if employees are kept on the payroll
small businesses suffering substantial economic injury as a
for 24 weeks after the date of origination, and the money
result of the Coronavirus (COVID-19).
is used for payroll for at least 60 percent of the covered
$2,775 Administrative
loan
To provide
amount
support
for payroll
for the
costs,
administrative
and may use
expenses
up to 40
of the
percent
Small Business
of such
Administration
amount for any
(SBA)
payment
headquarters
of interest
and
on
field offices operations for CARES Act program
1 implementation, as well as to prevent, prepare for, and
respond to coronavirus.
$582 Administrative To provide support for the administrative expenses to
carry out the Economic Injury Disaster Loan program in
response to coronavirus.
$25 Administrative To perform the necessary audit oversight of CARES Act
related loans and activities.
2
SBA ANNOUNCES NEW
REDUCED 504 LOAN
DEBENTURE RATES
The U.S. Small Business
Administration announced the updated
interest rates for the 504 Loan Program
offered by Certified Development
Companies (CDC). Small businesses can
now apply for the lowest interest rates
since July 2018 as the program is now
10 | AUTO DETAILING NEWS | VOL. 5, NO. 3 • FALL 2020