ARKANSAS (KNWA/KFTA) — The COVID-19 pandemic has caused many business owners to readjust their bottom line. The Small Business Administration (SBA) is offering financial help, but there are guidelines that must be followed to get a loan approved.
SBA’s website details the various loans on its “Coronavirus Relief Options” page. Click here to download the application(s), apply online, or search for additional information.
Here are some loan options, from SBA’s website, for business owners to consider to help them make ends meet.
SBA Debt Relief: A financial reprieve to small businesses during the COVID-19 pandemic.
SBA Express Bridge Loans: Allows small businesses, that currently have a business relationship with an SBA Express Lender, quick access to funds — up to $25,000.
Economic Injury Disaster Loan Emergency Advance (EIDL): This loan advance provides up to $10,000 of economic relief to businesses that are experiencing temporary difficulties.
Paycheck Protection Program (PPP): Provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program.
The SBA’s PPP is a key part of the economic stimulus package that allocates $349 billion for small businesses to access forgivable loans for payroll and overhead.
Here’s how PPP works: The program offers loans of up to $10 million at 1% interest to companies and nonprofits with fewer than 500 workers. The intent is to fund up to two months of payroll and overhead expenses. IF the borrower retains workers and doesn’t cut their wages, the government will forgive most or all of the loan and repay bank lenders.
And there is not a PPP limit by state for the SBA loans/grants.
As for getting the loan, the University of Arkansas’ Walton College of Business Center for Business and Economic Research Director Mervin Jebaraj said there is no preference for smaller or larger banks. “But, since the total amount of $350 billion is given out on a first-come-first-served basis, larger banks with more staff might approve more loans faster than smaller banks.”
Jebaraj believes Congress will have to go back and put more money into PPP, “because there’s just too much demand.”
The PPP is currently the most talked about resource for business owners. Arvest Bank is an SBA Preferred Lender, “that means we have extensive experience in working with small businesses on SBA issues,” said Arvest Bank’s Media Relations Manager Rob Keys.
Each business owner’s situation and needs, to stay afloat during the pandemic, varies. Keys recommends to contact your banker [or Arvest], “talking through your situation and possible options is a good starting point.”
ADDITIONAL FUNDING SOURCE FOR ARKANSAS
Arkansas’ expected share for state and local government expenditures on COVID-19 related items is $1.25 billion in federal funds, this is from the CARES Act. There is a 15-member committee that “shall serve an an investigative and advisory body of the Governor,” according to the Executive Order. Read the EO here and to see who is on the committee.
LOCAL BUSINESS OWNER
Highland Pet Company owner Renette Barnes opened her specialty pet supply store in May 2018. It is family-owned and operated. Things have changed a bit since last year and Barnes said the most challenging part about the pandemic, in relation to her business, is similar to what grocery stores are dealing with and that is trying to keep up with the demand for dog food and supplies. “Also, with more people working from home they need chews and tough toys to keep their pups busy while they are trying to work,” said Barnes, so that works in her favor business-wise.
The Bella Vista-based pet store has free delivery and curbside pick up, something they have always offered. “Both services have increased since COVID-19 … and for now I limit the amount of customers inside at any given time,” said Barnes.