Many Alabama businesses are facing extremely difficult choices caused by the coronavirus pandemic. With no money coming in, employers must decide whether they need to lay off their employees or, in some cases, close their businesses entirely. Congress recently passed a stimulus law that will allow certain business owners to seek loans and funding. However, understanding coronavirus relief is complicated.
Alabama Launched a Website to Help At-Risk Business Owners
Alabama recently launched the altogetheralabama.org. This website helps businesses learn about and access resources to help survive the coronavirus pandemic. The website has a list of all of the different types of federal, state, and local levels of help for business owners.
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Below are some of the different types of financial assistance you might qualify for as a business owner in Alabama. If you are a small business owner who is not sure whether or not you qualify for assistance, or you need legal advice on a matter related to the shut down orders, the law firm of Heninger Garrison Davis can help. Contact our Atlanta law firm to schedule your initial consultation today.
SBA Paycheck Protection Program Loans
These loans are the lesser of $10 million or 2.5 times the amount of your average monthly payroll, whichever amount is less. The federal government has created a loan program for qualifying small businesses. These paycheck protection program loans offer partially forgivable 1% low-interest loans. These loans mature in two years. Nonprofits and small businesses qualify for these loans. SBA makes these loans forgivable through an existing network of 7(a) lenders.
Are These Loans Forgivable?
The Paycheck Protection Program is essentially a loan that acts like a cash grant. As long as you are able to keep your employees on payroll for eight weeks, you will not have to pay back the loan. The purpose of this loan program is to give business owners an incentive to keep their employees on their payroll.
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Some of the Paycheck Protection Program Loans are forgivable. However, they only become forgivable when the business keeps its existing payroll in place for at least an eight-week period. If you, as a business owner, do not keep their existing payroll in place for at least eight weeks, you will need to pay back your payroll loan. You will also need to pay back a small portion of the sum you used for your mortgage, rent payments, utility service agreements, and leases, during that eight-week period.
SBA Express Bridge Loan Pilot Program
The Express Bridge Loan Pilot Program helps businesses stay financially afloat while they wait for assistance from the Economic Injury Disaster Loan to come into place. Small businesses and nonprofits qualify for this loan in an amount up to $25,000. Small businesses who currently have a business relationship with an SBA Express Lender can access up to $25,000 while they wait. Financial institutions can use these loans as term loans or as a gap while businesses apply for a direct loan.
Economic Injury Disaster Loan Program
The Economic Injury Disaster Loan Program offers loans up to $2 million that are direct from SBA at 3.75% as well as a possible $10,000 cash advance. Nonprofits can receive the loan at a 2.75% interest rate. Alabama businesses can take advantage of this program now so that they can keep paying their vendors and employees while they remain shut down.
Requesting a Grant Through a Private Company
Multiple private companies have begun offering grants to businesses negatively affected by a coronavirus. For example, Facebook is offering small business grants. They have committed $100 million in international funding that will soon be available for small business grants.
There are many different crowdsourcing loans available, as well. In a crowdfunding loan, small businesses can list themselves in an online funding site. They can ask their customers and other investors to pool capital in order to make a loan. Most of these programs allow you to not make payments for the first year and then pay a percentage of your future revenue back to those who initially made the loan.
Our Law Firm is Here to Help
Small businesses in Alabama are facing an extremely difficult economic climate. If you are a small business that needs help surviving the next few weeks and months, our Atlanta law firm can help. We can review your situation and help you apply for the financial assistance that you need. Contact us today to schedule your initial consultation.