How To Get Emergency Money for Your HVAC Business During COVID-19

Options for Your Small Business Facing Money Issues During Coronavirus

The Coronavirus Aid, Relief and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

Let’s talk about the available loan options.

Paycheck Protection Program

A great option for:

  • businesses with fewer than 500 employees
  • sole proprietorship, independent contractor and eligible self-employed individuals.

This program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The Small Business Administration (SBA) will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.

How much can I get?

Loans can be up to 2.5 times the borrower’s average monthly payroll costs, not to exceed $10 million.

Will this loan be forgiven?

A borrower is eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:

  • Payroll costs (using the same definition of payroll costs used to determine loan eligibility)
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Rent on a leasing agreement
  • Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
  • For borrowers with tipped employees, additional wages paid to those employees

Where do I go to apply?

Call your existing bank first (or whoever handles your loans/deposits). If they are not an SBA approved lender, ask them for a referral.

Paycheck Protection Program

For more information about the Paycheck Protection Program, visit the SBA website.

U.S. Small Business Administration (SBA) Economic Injury Disaster Loan Assistance (EIDL) program

A great option for:

  • businesses with fewer than 500 employees
  • sole proprietorships, independent contractors and self-employed persons
  • private non-profit organization
  • 501(c)(19) veterans organizations

This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.

Am I eligible?

The SBA’s Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

How do I get my money?

The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.

EIDL Program

Learn more about how to apply for a COVID-19 Economic Injury Disaster Loan and loan advance.

SBA Express Bridge Loans

Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a short-term loan or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.

If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.

 What are the terms?

  • Up to $25,000
  • Fast turnaround
  • Will be repaid in full or in part by proceeds from the EIDL loan

EBLP Program

For more information, read the SBA Program Guide which outlines the procedures applicable to the Express Bridge Loan Pilot Program.

SBA Debt Relief

The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.

As part of SBA’s debt relief efforts,

  • The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
  • The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.

For current SBA Serviced Disaster (Home and Business) Loans

If your disaster loan was in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through December 31, 2020.

Loan Deferment

If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your Loan Servicing Office directly.

 

PLEASE NOTE: Information about these programs was taken from the SBA and U.S. Chamber of Commerce websites. This information may or may not be right for you or your business, and we encourage you to explore the sources we’ve provided and resources provided to you by the US Government and your loan advisor in order to decide what’s best for your individual situation.