If you missed the first round of COVID-19 relief for small business, you now have another opportunity to apply for a loan to keep your business afloat.
On April 23, Congress passed another relief package worth $484 billion. What that means is another $310 billion to replenish the Paycheck Protection Program.
The good news is, small and rural-based businesses should find they’ll have a somewhat easier time accessing this relief. This time, Congress set aside $30 billion specifically for community banks and credit unions.
If you plan to apply do so quickly, because loans are awarded on a first-come, first-served basis. The original CARES Act was passed into law on March 27, and funding became available April 3. It took two weeks for the $376 billion in funding to be depleted, and the Small Business Administration stopped accepting applications.
In a nutshell, the Paycheck Protection Program gives loans to businesses that can be forgiven as long as the money is used towards payroll expenses for employees. These loans cover 8 weeks of expenses, but businesses should spend three-quarters of the funds on retaining and rehiring employees. If they don’t, the businesses will be assessed a 1% interest rate and the loan would have to be repaid in two years.
If I didn’t get an answer in the first round, do I have to reapply?
No, because your application is already in the queue.Turning in an application that is both accurate and complete is, of course, critical to a successful outcome. But you can confirm with your loan officer to see if further action is required from you.
How long does it take to get the loan?
It varies from borrower to borrower. Some were notified of approval in a matter of hours and received their cash in a couple of days, while others are still waiting for their money. Some borrowers report faster results from working through a community bank. When you do apply, keep in mind, loan officers are working through a high volume of applications. To speed things up, come as prepared as possible.
Need more information about COVID-19 relief?
Minnwest Bank has pulled together a small business guide to the coronavirus emergency loans to answer many of your questions before you apply.
You’ll also find our frequently asked questions about the Paycheck Protection Program.
For additional resources on grants, payroll and other information, the Minnesota Chamber of Commerce has compiled and is maintaining a resource page for business owners.
During these uncertain times, the specialists at Minnwest Bank are there to guide your financing options. We’re not only an SBA Preferred Lender, we’re also in your community, so you’ll get the guidance you need for your next steps. To get started, talk to one of our commercial bankers.