Most large corporations have some debt as a standard financing practice. Depending on the economic situation, debt financing can be far cheaper than investor financing. But for many small businesses, having to service debt each month can mean the difference between taking home a paycheck or not, hiring one more employee or working extra hours, or paying your bills on time. Cash is oxygen to small businesses, so you can, and should, pay down your debt. Here are several ways in addition to sacrificing income, new hires, and personal time.

The US Small Business Administration (SBA) Debt Relief

From the SBA website: “The SBA will pay 6 months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020.” If you have one of these loans, you do not need to apply for this assistance. According to the SBA, assistance will be automatically provided as follows:
  •  Loans not on deferment, SBA will begin making payments with the next payment due on the loan and will make six monthly payments.
  • For loans currently on deferment, SBA will begin making payments with the next payment due after the deferment period has ended, and will make six monthly payments.
  • For loans made after March 27, 2020, and fully disbursed prior to September 27, 2020, SBA will begin making payments with the first payment due on the loan and will make six monthly payments.
SBA borrowers should contact their lender for answers to specific questions about this payment relief plan.

SBA Economic Injury Disaster Loans (EIDL)

On June 15, the SBA announced that the EIDL program is open again. Small business owners in the US, including Washington D.C. and territories, can apply for an Economic Injury Disaster Loan advance of up to $10,000. This loan advance will not have to be repaid. Recipients do not have to be approved for a loan in order to receive the advance. The amount of the loan advance deducts from the total SBA loan eligibility.

Corporate Assistance

That’s right: corporate America is helping out America’s small businesses. Here are just a few examples of US enterprises lending a helping hand to small businesses. While such help is generous, keep in mind that it is in these corporations’ best interests to help out the small businesses that put money in their bank accounts. For example, Morgan Stanley's Brian Nowak estimates small businesses comprise 30% to 40% of Facebook's overall advertising base.
  • Facebook is offering U.S. small businesses $40 million in grants to help them navigate the coronavirus crisis. Go to facebook.com/grantsforbusiness to determine if your business is eligible. They also rolled out additional features to help small business owners. Facebook now lets business owners to start a Facebook personal fundraiser for their own business. So they can ask their most loyal customers for help with operating costs during the crisis. In addition, they made it easier for businesses to communicate temporary service changes — like changes in open days and hours — to their customers.
  • Lowe’s has put up more than $50 million in various types of relief funds for small businesses since the COVID19 pandemic hit the US. In this latest round of funding, the company will “offer small business grants through some of the company's key partners. Including its supplier diversity network. The funds will also expand support to small business home improvement professionals.”
  • Vistaprint, Facebook, Verizon, and others offer grants that can help keep your small business afloat during the coronavirus crisis. Companies can qualify for these grants if they have 3 - 20 employees. Located in an economically vulnerable community, and have been impacted by the COVID-19 crisis.
  • Finally, here’s a guide of all the companies (as of this writing) offering small business assistance in many different ways to help America’s small businesses weather this storm.
Regardless of how you do it, whether you listen to Clark Howard or Dave Ramsey, what you need is a plan. Now that you have a few more tools in your belt, you can make that plan to pay off that debt and free up that cash.
As of this writing, the rollout of the SBA PPP (Paycheck Protection Program) is 2 weeks old. From everything we can gather, at this time, hundreds of thousands of "small businesses" have applied for a forgivable SBA PPP loan. The SBA continues to issue "guidance" in the form of Frequently Asked Questions and answers. The headlines continue to ring with negative news about the rollout, including one that says the SBAs computer systems crashed and another that said the SBA is struggling to meet the demand for these loans. That shouldn't surprise anyone, given the speed and size of this program rolled out by the Federal Government. The SBA is responsible for $349 Billion in loans to small businesses, but the banks, credit unions, and other lenders are the entities who have to actually do all the intake for the loans. The SBA PPP is a big, huge, government program, and it's going to have lots of issues. There are more than 30 million small businesses in the United States today. How many of them are suffering in the wake of COVID-19 and the corresponding government shut downs? A LOT! We're trying to make the process a little easier on everyone.

The All Encompassing SBA PPP Guide (free download)

We've created a simple, but thorough guide to the process from the borrower's (small business) perspective, answering the following questions:
  • What is the SBA PPP?
  • Who is eligible for an SBA PPP Loan?
  • What can you use these funds for?
  • How much can you borrow?
  • How do you calculate how much you can borrow?
  • What info do you need to apply for an SBA PPP Loan?
  • What amount of the loan is forgivable?
Download the PDF guide here.

SBA PPP Explainer Videos

You can download and read the guide, or get the shorter (slightly more entertaining) version in this video on youtube. It literally answers exactly the same questions as we've listed above. Also, we're sharing more videos almost on a daily basis as we learn things that will help both borrowers and lenders.

Calculate Your Average Monthly Payroll Costs

We've published a calculator (MS Excel & Google Sheets) for small businesses to use to calculate their average monthly payroll costs and to give to their lender to provide thorough documentation of their average monthly payroll costs. You input your numbers, and the calculator generates your maximum loan amount. Remember, the SBA PPP  help small businesses through about 2 months or so of payroll to keep employees employed, so your business can stay in business after the pandemic has ended.

Apply for sba ppp loan online

We've created (what we believe is) the easiest online SBA PPP application in the world! OK, let's not get carried away, but it's really good. So, if you're a small business, you can apply using our online application. If you're a lender of any kind, and you're struggling with the volume of applications, you can adopt ours. We made the process plug and play for lenders, really easy to get started, and we're standing by ready to help you get onboarded so you can accept more applications and fund more loans. Apply online for an SBA PPP Loan here.

Virtual accountants and bookkeepers to help you

Finally, last year, we rolled out our virtual accounting and bookkeeping services, and we've got a network of over 400 vetted accountants and bookkeepers ready to go to help you get through this application process. We base our matches for you  on these criteria:
  • Budget
  • Proximity
  • Industry
  • Experience
  • Accounting Needs
  • Business Objectives
  • Bookkeeping Requirements
It's free to get matched. You only pay your new virtual accountant or bookkeeper if you both agree to work together. You can complete the signup in just a few minutes. Get your PPP loan done right with the help of one of these professionals. The CARES Act is a $2 TRILLION program. The SBA PPP is offering $349 Billion in forgivable loans to help small businesses stay in business. These programs are huge, so expect some bumps in the road and a headache or two, but we are here to help you get through it easier and faster.
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