Hey, everybody. Happy Friday. I’m Bette Hochberger, CPA, CGMA, and we have a special finance Friday for you today. We’re going to change things up a little bit, and we’re going to do an SBA Roundup because there’s been a lot going on with the SBA, in case you haven’t been paying attention. They extended the PPP deadlines out to May. If you were thinking about putting in a PPP application and you haven’t done it yet, you have a lot more time, so go ahead, get that application in. You can do round one, round two, both of them, one of them, whatever you need, whatever you can get your hands on. Get a PPP loan from the SBA. It’s going to be a lot of Alphabet Soup going on today.
Targeted EIDL Advance
The first thing of the SBA Roundup we’re going to talk about is the targeted EIDL Advance. Ooh, what is that? You might remember last year when all the stimulus things, not the individual, the business stimulus started coming out, the PPP, EIDL, all that stuff, you were supposed to get a $10,000 grant just for existing, more or less.
The SBA was supposed to give everyone a $10,000 grant to keep you afloat while the country went into lockdown. Well, if you went and put in an application for that, you might know that you probably didn’t get a $10,000 grant unless you had ten or more employees. Because the SBA decided they would only give you $1,000 per employee, which I know personally made me very upset because I didn’t have that many employees. But now we’ve got this EIDL Targeted, Advanced Grant.
Supposedly, if you’ve put in for this grant previously, and you did not get that total $10,000, you should be able to get some amount now, maybe up to that $10,000. You had to apply for this previously, and if you applied and found out they ran out of money, you’re still in the pot for this one. There are some new qualifications, though. In addition to applying, your business must be in a low-income community; there is a map. You have to have 300 or fewer employees and had a greater than 30% reduction in revenue during eight weeks beginning on March 2, 2020, or later.
Additionally, if you’re in a low-income community, have less than ten employees, and have a greater than 50% reduction in revenue during those eight weeks, you can get an additional $5,000. It’s a new tier that didn’t exist before. You will receive this $5000 on top of the $10,000. Now, how do you get this? You don’t put in a new application. The SBA will email you if you already have an EIDL grant, and they’re going to invite you to a website where you will give them your information.
The other cool thing is, similar to the EIDL grants before, this will not affect your PPP loan forgiveness. Initially, they said the EIDL would lower your forgiveness, and then back in December; they said, “No, EIDL grants, and that includes this new version, are not going to affect your PPP loan forgiveness.” Establishing that the PPP loan and the EIDL grants were two separate entities. Hopefully, if you didn’t get the entire $10,000, you’ll be able to get more this time.
EIDL loan limit increase
Next on our list is the EIDL loan limit increase. If you put in for the EIDL loan, this is different from a PPP loan, and it’s dissimilar from the EIDL grant. EIDL is a traditional loan; they aren’t new. These are emergency disaster loans created by the SBA to help get your business back up and running if you get hit with an emergency disaster.
As of April 6th, there’s now a loan limit increase. It went from a maximum of $150,000 up to half a million—$ 500,000. Once again, you don’t need to apply for this new amount. The SBA is going to contact you. They’re going to send you an email and say, “Hey, you’ve got this loan. We’re allowing you to request additional funds if you want to.” You had to respond with an email to a specific address with a particular subject line. They wanted information like your EIDL loan application number, the loan number, your name, address, some of that basic stuff so they could identify you.
A lot of this stuff is first come, first serve, so if you think you might want additional EIDL loan money, respond right away when you get that email. They’re also extending the deferment. At first, it was six months that they gave you before you had to start repaying. Now, it’s being pushed out 24 months after the date of your loan if you got it back in 2000. They’re pushing out two years out to 2022.
If you get a loan granted in 2021, you’re going to get 18 months to start repaying. The economy and many businesses have not come back the way I think they were hoping a year ago, helping struggling businesses. It’s an unsecured personal guarantee for loan amounts that are over $200,000 for anyone who owns more than 20%. What does that mean? They are saying you need a personal guarantee, but it’s not secured, meaning you do not have to put up collateral. You don’t have to put up any assets to ensure that. It’s pretty awesome.
For any loan under $500,000, there’s no real estate collateral required at all, so you don’t have to worry about that. Things that didn’t change about the loan: 30-year maturity. Woof, long time. I hope I’m not still in business in 30 years, but who knows? For some people, that could be great. The interest rates are super low, 3.75% for a small business and the small business definition includes sole proprietors, independent contractors. If you’re a one-person shop there, it’s okay. You can still get these loans, and not-for-profits get a unique, even lower rate, 2.75%. If you need more EIDL, if you want it, when you get that email, get it.
Shuttered Venue Operator Grant
Last but not least, the somewhat disastrous Shuttered Venue Operator Grant. Now, this is brand new. This grant was created as part of the Consolidated Appropriations Act back in December. This grant is supposed to help those organizations in the performing arts and related industries because they’ve been hit hard. It’s a 16.2 billion dollar program. Oh, my Gosh, that’s so much money. The SBA is still a little dysfunctional. This grant was supposed to have been taking applications for a couple of months now. They were supposed to start Thursday, April 8th, but they had to shut it down within a couple of hours because of technical difficulties. I feel like people do this all the time, and they don’t find good people to make government websites.
Remember Obamacare when that first came out? I remember that. It was a disaster also. Here’s another government disaster, but it’s well-intended because there’s $16.25 billion available in the Shuttered Venue Operator Grant program. Now, who is eligible for this? Live venue operators or promoters, theatrical producers, live performing arts organizations, some museum operators, zoos, and aquariums. They have criteria they have to meet. Motion picture theater operators, AKA movie theaters, talent representatives, and then a couple of other stipulations such as you have to have been in operation as of February 29th, 2020, so you had to be in business already last year before all the COVID shutdowns.
If you’re getting a PPP loan or you received one after this new bill, your Shuttered Venue Grant is going to be reduced by the PPP loan amount, so they’re not mutually exclusive. You can get that PPP if it applies to you. You can also get Shuttered Venue if it applies to you. They’re just going to reduce it a little bit.
How much is this for? Well, it’s for 45% of your 2019 gross earn revenue or $10 million, whichever is less. This will be great for small businesses that meet these requirements; I’m actually part of one; I’m a treasurer of a theatrical group, we got walloped by COVID shutdowns. For us, fingers crossed, hoping to get in there and get back a lot of the funds that we lost as a result. The way it’s set up is in a three-tiered priority funding system. Then after those three rounds, there’s a supplemental round if there’s any money left.
Yeah, it’s an extensive application. I’m not going to lie. If you’re thinking about getting this, be prepared to do a lot of paperwork. And Don’t you think it’s going to take you two seconds. This will take a few hours, hours, one of the most complicated SBA applications that I have seen or dealt with. It’s a tiny bit intense. That’s your Shuttered Venue.
Oh, one other thing, you’re not getting your money right away if you apply for this. They said, at best, you’re getting it later in April, hopefully. I guess that depends if they get the application back up and running. Who knows? Who knows what’s going to happen there? That’s it for this finance Friday. That was your SBA Roundup. I’m going to keep you informed as best I can on the things going on. If you have any questions, comments, or opinions on anything here, please drop a message in the comments. We’ll try to respond as quickly as possible. As always, thank you for watching. We’ll see you next time.
