Patience is not my greatest virtue. However, patience is required during these trying times!
A prime example of much-needed patience is what I have been dealing with this week. Since the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act was enacted last Friday afternoon, March 27, 2020, there has been a flurry of new information for small business owners like you and me to digest.
On Monday, March 30th at 10 A.M. CDT, I attended a conference call/presentation by Small Business Administration (SBA) San Antonio district office. The meeting was flubbed from the start because they did not have any information for us related to the CARES Act. One attendee said in the chat “This is a waste of time.” which wasn’t too far from the truth since they were having technical difficulties and were unable to present as they had intended.
However, I did learn a little tidbit about the Economic Injury Disaster Loan (EIDL) forgivable loan advance (grant) application process and then promptly applied for a DMR Accounting & Consulting EIDL loan in order to learn about the process so I am able to share my experiences with you.
Important note: at Monday’s meeting the SBA rep said that anyone who had started or completed an SBA disaster relief loan application during the prior week would need to start over and re-submit a new application this week. The rep said it was because they had problems with their legacy system crashing that they now have a new website.
Fast forward to today, Thursday, April 2, 2020, which is 3 days after I completed the “new” EIDL application and when the “up to $10K forgivable loan (i.e. grant)” should have been deposited into my business bank account. And no, I haven’t heard anything back from the SBA…no email, no deposit, no phone call, no nothing, nada.
At another presentation by the SBA San Antonio office yesterday, the representative said to call the SBA disaster customer service center number (1-800-659-2955) if we haven’t heard anything yet.
So, I dutifully called them around 8:30 this morning where I was put on hold and number 368 in the queue. Since I am determined to learn as much about this SBA loan process as possible, I sat on hold for 29 minutes before a really sweet lady named Pamela answered. After I gave her my application identification number, she said “All of the applications received by the SBA before Tuesday, March 31st had been “discontinued” so my confirmation code was not valid and the application needed to be completed and submitted again.”
I asked Pamela “why did this happen?” and she said that she was sorry and offered some kind words about how she thought my business was important to the world. It was very nice to hear even though I know it was a script that she was trained to say to everyone. I felt sorry for her since I heard her voice waiver like she was choking back tears, so I told her “thank you” and hung up with her. I then completed the EIDL application process for a second time.
On today’s EIDL application, some of the wording had changed since the application I filled out on Monday, but the majority of the questions were the same. These are examples of the some of the info it required:
- business name, address, EIN number and start date of business
- ownership info including % of ownership, SSN(s) and home address(es)
- # of employees
- Annual revenue last 12 months – Feb 2019-Jan 2020
- Cost of Goods Sold last 12 months – Feb 2019-Jan 2020
- Bank account info = account # and routing number
Fingers crossed that in 3 business days, I will hear something from them and won’t have to fill out the form for the third time…I’ll keep you posted.
With all this said, I recommend that ALL small business owners apply for this EIDL loan and in the process be sure to check the box on the application regarding consideration of the “up to $10K forgivable loan advance (grant)”. Also, be sure to use either Microsoft Explorer or Microsoft Edge when you apply as these work best with the SBA’s system.
It is a simple process and doesn’t require you to go to your bank, plus, according to the SBA representative yesterday, you can apply for both this disaster relief as well as the other Paycheck Protection Program (PPP) loan and other SBA loans as well.
There are 3 flavors of SBA COVID-19 disaster relief loans as follows:
1. Economic Injury Disaster Loan and loan advance (EIDL-discussed above) https://covid19relief.sba.gov/#/
2. Paycheck Protection Program (PPP) – Applications for this loan will open tomorrow, Friday, April 3rd for businesses with 1-500 employees and Friday, April 10th for self-employed and independent contractors.
· 75% of these loan proceeds must be used for payroll for 8 weeks in order to be forgivable.
· If companies have already laid-off employees and if the employees are restored in full by June 30th they may be eligible for the forgivable portion of this loan…the details are still fuzzy but more info will be coming soon.
3. SBA Express Bridge Loans
The first loan option is what I completed which requires the completion of a short application on the SBA website. The EIDL application is similar to (albeit a little longer) a credit card application.
Again, you can apply for multiple SBA assistance loan programs. The only caveat, if you choose to do so, is that you cannot use funds from multiple sources to pay for the same expenses (i.e. you cannot double-dip and pay for April’s rent or mortgage payment with the SBA loan money from both the EIDL and PPP funds. Instead, you could pay April’s office costs with EIDL funds and once those dollars are exhausted then future costs can be paid by the PPP funds).
When applying for one or both of the second two assistance loans (#2 and #3 above), you must go through an SBA approved lender.
There is also a fourth SBA Debt Reduction program for those who already have or will receive an SBA 7(a) loan prior to September 27, 2020, as well.
A summary of all four of these resources can be found here: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
From what I understand so far (keep in mind this is an extremely dynamic situation that has been changing daily as new guidance is being released), the SBA is trying to get as many banks as possible on the PPP lending program hopefully by the end of this week or next. Accordingly, if your bank is not currently approved by the SBA, please check back later to see if it is added to the approved list and/or contact your bank directly to ask them if they have plans to work with the SBA sometime soon.
Also, per another SBA class I took last week, the SBA approved banks are requiring that you have an existing relationship in order to apply for an SBA loan. Therefore, an SBA approved bank may not be able to offer SBA coronavirus relief loans to new banking customers.
Since this is such a fluid situation and likely we will not have all the guidance for another week or two, please hang in there and be patient! We are all in this together and the more we are kind to each other and ourselves, the easier it will be on all of us collectively.
Please let us know if you would like assistance with navigating the loan application maze or any other accounting and bookkeeping needs. We are here for you!
Big virtual xoxo’s to you and your loved ones,
Deidra Ryan and the entire DMR Accounting & Consulting team
P.S. Public Service Announcement: Please stay home if you can and keep washing your hands!
We are sending our love and prayers to all the grocery workers, truck drivers, farmers and health care workers who are keeping us well fed and healthy while being on the front lines of this unfortunate disease. We are also doing our part – all of us, here at DMR, are working remotely with each other and all our clients.
Finally, to all of you parents, may God bless you during these unprecedented times. Our prayers of understanding (Kyle and I have a 5th grader and a 1st grader, so we truly feel your pain!) and peace are going out to each of you for your strength and courage on the homeschooling front. It certainly isn’t for the faint of heart!
Take care, everyone!