Are you a small business impacted by COVID


President Donald Trump recently provided a form of help for small businesses struggling to survive the coronavirus crisis.


During a time that small businesses are prone to suffer, the president of the United States, Donald Trump, made it possible for business owners to apply for the government help starting in April. According to The Wall Street Journal, the law, which Donald signed in March, was part of the roughly $2 trillion economic-stimulus plan approved by Congress.


So, if you are a small business owner, this article would be helpful to you as we have drawn up the process you need to follow to secure the government's help.


Without much ado, below is everything that you need to know about the small business loans.


HOW WOULD THE PACKAGE WORK?


Payments for the small-business loans — which are paid through the Paycheck Protection Program (PPP), offer up to $10 million for companies that have 500 or fewer employees.


What getting the loan means for business owners is that they get to keep the money as long as they use it to either keep paychecks going to people earning up to $100,000 a year, or for monthly rent/mortgage and utilities.


According to the CARES Act, if the money is used for anything else, the borrower has ten years to repay, at a 4% rate. However, the guidelines posted by the U.S. Treasury recently stated that the rate was set at 0.5% if a business owner could repay the loan within two years.


The small-business loan also comes with a government guarantee that would protect the concerned bank from loss. The move, which has been considered a "bold effort" by many, would be a relief for the nearly six million U.S. small businesses which have anywhere between one to 500 workers. 


Together, these small businesses have a total workforce of 60 million people, which is almost half the private-sector workforce.


HOW LONG WILL THE MONEY LAST ONCE RECEIVED?


The small-business loans from the Payroll Protection loans were ideally intended to last for the next three months. While speaking on the subject, Guy Ciarrocchi, the president of the Chester County Chamber of Business & Industry, pointed out that, "That will get us through June. By then, either we'll have returned to normalcy, or we'll all be in a much deeper hole. This is about cash flow, liquidity, help us all to tread water."

Guy urged businesses that believed that they would be late on payments to reach out to their "landlords, banks and credit card companies" and ask for extensions — which he claimed are often being approved.


HOW DO YOU APPLY FOR THE LOAN?


Applying for the small-business loan has been made easy as an applicant just needs to either call or email his/her bank and ask for the loan officer in charge of SBA 7(a) loans and the PPP program. Any interested business owner could also make enquires at the SBA Philadelphia regional office website as turning up at the bank without first contacting the people handling the loans, was not an acceptable strategy.


HOW ARE LENDERS HELPING TO MAKE IT EASIER FOR BORROWERS AT THIS PERIOD?  


With the ever-present need for small businesses to survive the coronavirus pandemic, it is paramount that owners know if lenders are willing to help. The chief lending officer at Ardent Credit Union, who overcame the banking crises of the late 1980s and 2000s, Anthony Silvi stated in response, "We're doing the things you would expect: payment deferrals, listening to members, making sure they are comfortable with their obligations."


To that end, the chief lending offer made it known that he has been training lenders to do workouts on delinquent loans as he shared his hopes that sixty- to ninety-day grace periods would be long enough to avert error.


Anthony added that a lot of people who have lost their incomes were "trying to take this in stride" and were "optimistic they can move forward." One of the ways that small business owners can move forward would be to partake in the financial counseling sessions which allow discussions about budgeting.


There were also real estate loans and car loans available to those who might require them.


WHAT EFFECT WILL THE PANDEMIC HAVE ON THE ECONOMY ONCE IT'S OVER?


While the new small business loan has afforded the United States government a more significant role in the country's economy, there are some possibilities that the economy could decrease to a five percent-plus later in the year. While addressing the outcome of coronavirus pandemic on the economy, Richard X. Bove, warned that "the nation will come out of the COVID-19 period owing far more." 


Richard, who is a longtime bank analyst at the Odeon Capital Group, New York, claimed that financial analysts are concerned that the cost of recovery would lead to price inflation. Going by the recent shortages of surgical-mask fabric, drugs and rubbing alcohol brought on by the coronavirus pandemic, the bank analyst also predicted that the Trump administration would apply more pressure on its anti-trade policies. The pressure would cause an increase in consumer costs as the government makes an effort to reenergize U.S. manufacturing. With the need to grow the economy, the government would most likely make more investments while creating more jobs in the United States.


In the meantime, Johnson & Johnson stated back in March that it was accepting up to $1 billion in federal funds to help in the mission of creating a coronavirus vaccine. It was expected that the recommended $450 million vaccine production factory would be erected in the U.S. There have even been hopes that the factory would be built in either New Jersey or Pennsylvania because that is where the company's customers are located.


WHERE CAN SMALL BUSINESS OWNERS APPLY FOR THE PPP LOAN?


Once an interest has been indicated by a small business owner, the person can apply for the PPP program, which can be filed by banks that make SBA loans, by downloading it from the website of the U.S. Treasury. More information can also be found on the ADP website - https://sbshrs.adpinfo.com/covid19-small-business-loans.

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