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Good afternoon, everyone,

We have been receiving many requests for clarification regarding the Economic Injury Disaster Plan (EIDL), the $10,000 advance available under the CARES Act, and the Paycheck Protection Plan Program. I contacted the Small Business Administration (SBA) directly for further clarification and found them very helpful. I encourage you to call them with any additional questions you may have, as the wait time to speak with a live Agent was surprisingly very brief. Dial 1-800-659-2955 and press 1 (for impact of Coranavirus on business) then Press 2 (again, for impact of Coronavirus on business) and you will be connected to an Agent.

Economic Injury Disaster Loans (EIDL).  
These loans are provided by the Small Business Administration and were designed to provide small businesses with working capital loans to help overcome the temporary loss of revenue. They may be used only to pay fixed debts, payroll (more on this below), accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or to pay for expansion. Funds cannot be used to paydown long-term debt. They also cannot be used to consolidate debt.

CARES Act: $10,000 Advance through EIDL
On March 27, 2020, President Trump signed into law the CARES Act, which provided additional assistance for small business owners and non-profits, including the opportunity to get up to a $10,000 Advance through the Economic Injury Disaster Loan (EIDL).  Funds are said to be made available within three days of a successful application, and this loan advance will not have to be repaid.  On the last page of your EIDL application, you will be asked to check a box stating you want to be considered for the $10,000 advance. Even if your loan is denied, you will not be required to pay back this advance, if approved for it. If your loan is approved, this amount still does not become part of the loan, and will not need to be repaid.  
IMPORTANT: If you submitted your EIDL prior to 3/27/20, when the CARES Act was signed into law, and you now want to apply for the $10000 advance, you must reapply and submit a new application, and be sure to check the box at the end of the application stating you want to be considered for this advance.  
Click  on the following link   https://covid19relief.sba.gov/#/ to:
  • begin your application process for Economic Injury Disaster Loan, including the option to request the $10,000 Advance or
  • Reapply for your EIDL, including the request for $10000 (for those that applied prior to 3/27)
Paycheck Protection Program:
While the EIDL provided coverage/allowance for payroll expenses, t he Paycheck Protection Program was enacted on 3/27/20 as part of the CARES Act, as a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities ( at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The Paycheck Protection Program will be available through June 30, 2020.

Contact your local lender to ask if they are participating in the program. Lenders may begin processing loan applications as soon as April 3, 2020.
You can also apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
To see what information will be asked of you, you can download a sample Paycheck Protection Program application prepared by the SBA by clicking on the following link: https://www.sba.gov/document/sba-form--paycheck-protection-program-ppp-sample-application-form

I truly hope the above information has helped clarify some of this information for you. We certainly do not have all the answers at the Chamber, but we are striving to do our best to provide you with the most pertinent information for your business needs. 

Stay safe & healthy,

Marianne Melcher
Executive Director