Today, the SBA announced that they have processed more than 14 years' worth of loans in less than 14 days because of COVID! This is incredibly huge news. Many small businesses have relied on the Paycheck Protection Program and Economic Injury Disaster Loans to survive.
But all of this is coming to an end. The SBA is putting a hold on new applications for the PPP and EIDL as a result of COVID, now out of money for the loans. So... what next? And should we be worried?
A bulletin released last night by the SBA announced the pausing of new loans in light of demand. This could be disastrous for all sorts of businesses. If you have already applied, it is possible you will still receive the funding you need. However, applications are suspended until further notice.
The SBA released a statement with Treasury Secretary Mnuchin urging Congress to put more funding towards the PPP. If this happens, the SBA will once again be able to process loan applications, issue loan numbers, and protect millions more paychecks' during COVID, according to SBA Administrator Jovita Carranza.
The PPP and EIDL both have been massively beneficial toward small businesses in need of financial help. But what will this temporary shutdown entail? Well, hopefully Congress can pass another booster to the SBA soon. But if that's not possible, the small business community could face massive problems.
We want to split this into SBA and non-SBA resources that you might want to take advantage of in the interim.
If you are looking for funding, the SBA is still giving out traditional means of funding and loans. You can go through usual channels for this information. Also, the IRS and SBA have been working together to provide tax relief to small businesses. There are also state resources worth considering. These are individual, but small businesses development centers in each state could be helpful.
We've looked in to a number of different loans and programs that are outside of the purview of the SBA and the national government to deal with COVID. For example, international programs like Facebook are offering grants of their own, though they are still a bit less safe and in lesser numbers. There is also the wider small business lending ecosystem to consider, especially considering how expansive the programs involved are. It is not just a simple ask and answer, but banks and loans still exist.
No! This is not an ending but a pause. If you're worried about your financial stability post-COVID, loans from the SBA aren't the only answer. COVID has created a lot of problems, but it isn't a guaranteed end to your business. You can keep fighting, and we will keep helping.
Brian Cairns, CEO of Prostrategix Consulting. Over 25 years of business experience as a corporate executive, entrepreneur, and small business owner. For more information, please visit my LinkedIn profile
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