Arizona Small Business Financial Relief Options With SBA

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While the Small Business Administration is currently offering the very popular Paycheck Protection Program (PPP) loans until March 31, 2021,  there are a few other, lesser-known, funding options that might be right for your small business. The SBA offers several different relief options to help businesses, nonprofits, and faith-based organizations recover from the impacts of COVID-19. 

Economic Injury Disaster Loans (EIDL)

As of February 12th, the SBA has issued over $200 billion in emergency funding to more than 3.5 million small businesses, non-profits, and agricultural organizations (with 500 employees or less) through the Economic Injury Disaster Loan (EIDL) program. 

EIDL are intended to provide economic relief to those businesses that are currently experiencing a temporary loss of revenue. Unlike the PPP loans, which act more like grants, EIDL are true loans accompanied by interest rates and repayment terms.

The general terms for these loans are:

– Interest Rate: 3.75% (fixed) for business and 2.75% (fixed) for nonprofits

– Term: 30 years

– No pre-payment penalty or fees

– Payments may be deferred one year; but interest will continue to accrue

The loans can be used for “working capital and normal operating expenses”. This can include continuation of health care benefits for employees, business mortgage or rent, utilities, payroll, and even fixed debt payments.

Other notable differences from the PPP loans, is that your business may be required to put up collateral, like machinery, equipment, furniture, etc. for loans above $25,000. Additionally, EIDL are generally not eligible for forgiveness, unlike the PPP loans. 

The SBA is currently accepting EIDL applications and the deadline to apply has been extended to Dec. 31, 2021. 

Express Bridge Loans (EBL)

The Express Bridge Loan Pilot Program (EBL) provides expedited loan financing to “bridge the gap” for businesses that have been affected by COVID-19. 

The program allows small businesses who have a current, pre-existing business relationship with an SBA express approved lender to access up to $25,000 as soon as possible. 

These loans are intended to provide temporary economic support for businesses (to be used on various operating expenses) while said businesses apply or wait for approval on a higher-value direct SBA EIDL. 

The general terms for these loans are:

– Up to $25,000

– Fast turnaround

– Will be repaid in full or in part by proceeds from the EIDL loan

Any U.S.-based small business (maximum of $750,000 to $35.5 million in revenue or a maximum of 100 to 1,500 employees) with proof of hardship due to COVID-19 is eligible. The maximum allowable interest is 6.5% over the prime rate (currently 4.25%), and rates can be fixed or variable. No collateral is required, but various fees including application, late, and annual may apply. 

The SBA is accepting EBL applications through March 13, 2021, and because these are “express” loans, the SBA has ensured that businesses can expect to receive the funds within 45 days of approval, but no later than 90 days.

Shuttered Venue Operators Grants (SVO)

The Shuttered Venue Operators (SVO) Grant program was established in December 020 by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. The program includes $15 billion in grants to shuttered venues.

Eligible businesses include:

– Live venue operators or promoters

– Theatrical producers

– Live performing arts organization operators

– Relevant museum operators, zoos and aquariums who meet specific criteria

– Motion picture theater operators

– Talent representative

The businesses must have been in operation as of February 29, 2020 and the applicant cannot have applied for or received a PPP loan on or after December 27, 2020.

For businesses in operation as of January 1, 2019, grants will be for an amount equal to 45% of their 2019 gross earned revenue OR $10 million, whichever is less. For businesses that began operating after January 1, 2019, grants will be for the average monthly gross earned revenue for each full month the business was in operation during 2019 multiplied by six (6) OR $10 million, whichever is less.

Funds may be used for specific expenses, which include:

Grants cannot be used to buy real estate, make payments on new loans (i.e. those not in existence before 2-15-20), investing, or political contributions. 

The SBA is in the process of setting up this grant program and they are not yet accepting applications. Once the program launches, applications will be granted based on the greatest need. 

Priority is as follows: 

– 1st: revenue loss of 90% or greater between April 2020 through December 2020

– 2nd: revenue loss of 70% or greater between April 2020 through December 2020

– 3rd: revenue loss of 25% or greater between April 2020 through December 2020

– Supplemental Funding will be available after all Priority Periods have passed

As businesses continue to work through and recover during COVID, the SBA is refining existing relief programs and introducing new ones to help small businesses. Some businesses may even qualify for multiple forms of relief. This cross-program eligibility chart can help you decide which program or programs are right for you. 

Also, it is recommended that applicants work with a knowledgeable small businesses attorney to ensure their applications (including required financials) are accurate as well as when determining if the offered loan or grant terms will work for your business model. 

Contact Counxel Legal Firm

If you would like to talk to an attorney about employer pay obligations, contact us at (480) 744-6621 or at request@counxel.com. Don’t forget to check out the good things that others are saying about the services they received from Timothy Coons on Google.

This article is intended for informational purposes only and does not constitute legal advice for your specific situation. Use of and access to this article does not create an attorney-client relationship between you and Counxel Legal Firm. Please contact request@counxel.com or (480) 744-6621 to request specific information for your situation.

*Conveniently located off the 101 Freeway and the US 60 in the middle of Phoenix, Scottsdale, Tempe, Chandler, Gilbert, Mesa, and Queen Creek!

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