The impact of the shutdown has caused economic uncertainty, especially for small businesses.  

It is necessary to have a plan in place which will require preparation from the small business owners, themselves. One of the biggest concerns is going to be funding cash flow shortages. Access to capital is critical and could mean the difference in your business thriving or your business shutting down.  

The SBA is helping in many ways with the Paycheck Protection Program, the Economic Injury Disaster Loan Emergency Advance, and SBA Debt Relief. 

With SBA Debt Relief, the SBA will pay 6 months of principal, interest and any associated fees that borrowers owe for all current 7(a), 504, and Microloans disbursed prior to September 27, 2020. According to the SBA, the borrower does not need to apply for the assistance and is automatic for loans not on deferment and on deferment. 

If you are considering an SBA loan, the following is a brief overview of each option for businesses:  

7(a):  Applicants with weak credit history may apply for up to $5 million for working capital, purchase an existing business, refinance current debt, furniture, fixtures, or supplies. 

504:  Borrowers may apply through a Certified Development Company for up to $5.5 million.  This product is a long-term, fixed rate loan that can be used for fixed assets, expansion, or modernization.   

Microloan:  Entrepreneurs of small businesses and certain non-profit childcare centers can apply through mission-based lenders for up to $50,000 to startup or expand. 

This program will help provide time for the small business to get back on their feet by providing the business with cash flow for purchasing land or buildings, equipment, machinery, supplies and working capital.  

In order to apply for an SBA loan, you will need to find an SBA-approved lender and work through this lender. A member of our team at Wilke & Associates, CPAs and Business Advisors can help you with the application and additional paperwork required by the SBA.  

By Amanda Lynch 

Amanda is a general ledger manager and business advisor at Wilke & Associates. She currently serves closely held businesses using her prior experience as a corporate accounting manager in the manufacturing industry and prior audit experience in manufacturing & distribution, logistics, real estate, and pension plans.