A federal program designed to help get struggling businesses back on their feet after economic losses related to COVID-19 went live today (April 3), and experts say the time to act is now if an entity believes it has been, or will be, significantly negatively impacted by COVID-19 repercussions. “The dollars in the program are limited” and there’s no guarantee even worthy applicants will receive funding if they wait too long, warns John Neal, founder and chairman of PCRS Network, LLC.
The Paycheck Protection Program (PPP) prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses. Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
While the program was designed to quickly disperse aid and not hold up applications with complex demands, Neal said it is still important to be prepared to “defend” the numbers in an application. His advice: Run payroll records going back the past 12 months, then average those out, including benefits and other incidental costs.
Technically, the applicants don’t “ask” for a dollar amount, Neal says; instead, applicants are demonstrating what it takes for them to make payroll and related costs each month. The federal program calculates what an applicant needs for two months of payroll as it assesses how much, if anything, to award, Neal says.
In addition to acting quickly, Neal advises working with a bank or other entity that is already a Small Business Administration (SBA) Preferred Lender. An organization with that expertise stands a better chance of getting an application through the process with greater speed, Neal says.
“E-mail your application to your bank after you find out it is a preferred lender, then ask them to confirm receipt,” Neal says. Ask the bank if they need additional information, and follow up sooner rather than later to see how your application is faring in the process, he suggests.
Here are several other resources for seeking financial aid or advice:
- U.S. Chamber Material – CORONAVIRUS Emergency Loans Small Business Guide and Checklists
- Paycheck Protection Program (PPP) Information Sheet
- Assistance for Small Businesses
Author: Michael Causey