How to Get A Small Business Loan (SBA) for Your Business

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If your business is struggling right now (and many are), the Small Business Administration has a solution. A $2 trillion COVID-19 relief bill was recently signed into law that offers several provisions to help small businesses who are struggling during the covid-19 crisis. This bill will offer financial help to businesses with fewer than 500 employees, including physician practices and health care organizations. There are some SBA guidelines in order to qualify for loan approval. ​

SBA Loan Info

One unique thing about these loans is that they stipulate how you must spend the money. First and foremost, recipients must deal with their payroll. Getting employees paid for their work is essential. After that, remaining funds can be used for mortgage interest, utilities and rent. The loan guidelines also stipulate that these expenses must be paid for the period of eight weeks after receiving loan.

Though this seems a bit restrictive, there is a forgiveness clause. If a company maintains their existing employee and compensation levels for the eight-week period, then they can apply for SBA’s loan forgiveness. This may qualify recipients to receive full forgiveness of the loan amount.

Social Distancing

Though these seem like extraordinary guidelines, we’re all living in unusual times. At the moment of this writing, much of the world’s popular is under quarantine and/or restrictions. To slow the spread of covid-19, millions of people are now sheltering in place and observing social distancing guidelines. Millions of businesses have closed and hopefully this will be temporary.

World Health Org

Dr. Tedros Adhanom Ghebreyesus is the Director-General of the World Health Organization. He’s an internationally recognized malaria researcher and renown microbiologist. He comments:

“In the days and weeks ahead, we expect to see the number of cases, the number of deaths, and the number of affected countries climb even higher. Pandemic is not a word to use lightly or carelessly. It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death.”

He also said that this was the first pandemic that could be controlled and that if humans would continue to observe the prescribed precautions, we will eventually see declines in the number of cases and deaths.

For those businesses that are deemed “essential,” things have been hectic. Even large corps like Amazon and Walmart are struggling to keep up with demand as more consumers stay at home and order things online. Most of these companies are now trying to hire as many as 10,000 new workers. Of course, the caveat is that no one knows exactly how long this crisis will last. The jobs could disappear overnight if the economy is successfully reopened.

Is It Time to Reopen?

Many states are trying to reopen their economies but are struggling with this process. They’re fraught with problems that range from whether it’s safe to reopen to whether employees would be willing to risk it and go back to work.

So far, 22 million Americans have filed for unemployment benefits. That website is doing its best to keep up, but it’s not unusual to get error messages that say your information can’t be located at the time. It’s helpful to remember that all 328 million Americans are now experiencing the same things. We’re out of work, not sure what the future holds, not sure if we can pay the rent next month – the list goes on.

Tips for Success

If you’re planning to file for the SBA loan or for unemployment, try to be patient and have all your information ready so that you can complete the application in one session. Try to resist the temptation to check your status each day. This will cause the site to be overwhelmed and not perform well.

One famous economist has stated that if Americans will simply go back to buying only what they need for each week, the supply and demand issues will level out within just a few weeks and there will no longer be food shortages.

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