It’s a good idea if business owners apply for SBA stimulus loans right away


If you’re a Florida business owner struggling financially right now, the way so many are thanks to COVID-19, you know the future is uncertain for us all. If you’ve even toyed with the idea of applying for one of the Small Business Administration stimulus loans, I encourage you to go ahead and do so now.

Gerri Detweiler

Gerri Detweiler is a leading, nationally recognized financing and credit expert, with more than 20 years of experience. During the 2008/2009 financial crisis, Detweiler was interviewed hundreds of times, providing insightful expertise and actionable advice for traversing the turbulent landscape and unknown change. Today, she is education director for Nav, the trusted financing partner of over 1.2 million businesses, where she gives Nav’s customers certainty in an uncertain world through expertise and actionable advice.

While, yes, there is $367 billion green lit to aid small businesses impacted by the coronavirus pandemic, the fact is: We don’t know how long it will last. An unprecedented number of businesses have shut down or have seen a slowdown in sales. And those business owners are lining up to apply for the Paycheck Protection Program (PPP) or the Economic Injury Disaster Loan (EIDL).

If you aren’t clear on the differences between these two loans the SBA is offering to businesses, here’s a breakdown.

The EIDL provides up to $2 million per business, including an emergency grant of up to $10,000 that doesn’t have to be paid back. This loan can be used to:

• Provide paid sick leave to employees unable to work because of COVID-19
• Maintain payroll to retain employees during business disruptions or slowdowns
• Cover increased costs to purchase materials unavailable from your original source because of interrupted supply chains
• Pay rent or mortgage
• Repay obligations that can’t be met due to revenue losses

The PPP provides you with 2.5 times your average monthly payroll expenses in the form of a low-interest loan. You can request forgiveness of the principal amount of the loan for the eight-week period after you receive it if you use it to:

• Cover payroll
• Pay rent, interest on mortgage and utilities

Note: Nonpayroll expenses cannot exceed 25% for purposes of loan forgiveness.

The only place to apply for the EIDL is directly through the SBA’s online portal. The SBA makes the disaster loans, not banks.

For the PPP, you should start at the bank you do business with because many banks are choosing to prioritize approving loans for current customers and you could be fast-tracked through the process.
When possible, it’s great to keep that working relationship with your local bank and previous lenders.

However, these are unprecedented times and not every SBA lender is going to be capable of lending the dollars that are needed by business owners. Reasons for this might include: too many applicants versus funds available; lack of technical capabilities; or loan size/underwriting.

If your bank won’t, or perhaps can’t, lend to you, consider going to Nav. Nav is a marketplace, not a lender, that works with multiple lenders to help match borrowers to loans.

It can be frustrating to wait for your application to be approved, but there are two resources that might make the wait a little easier.

The first is the CARES Act SBA Loan Calculator. It is designed to help business owners understand how much they might be entitled to under the PPP. It also includes a list of frequently asked questions. Additional information is also provided alongside the tool.

The second is Nav’s blog, which has frequently-updated articles on COVID-19 content as it relates to small businesses.

Again, if you’re even considering applying for SBA funds, don’t wait. Acting now might ensure that your business will come out all the stronger and more resilient than ever.

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