Differences Among Types of SBA Pandemic Funding and What Your Business Owes Now
The US Small Business Administration (SBA) has provided a range of funding options to small businesses in Florida, especially during the COVID-19 pandemic. Some businesses received loans, some received money that was akin to a grant, and others received a combination of the two. Now that many of the loans are due, businesses should work with a West Palm Beach business lawyer to ensure that they have a clear understanding of the type of funding they received and what their options might be for repaying any loans that have now come due.
What Kind of Funding Did You Receive (and Do You Have to Repay It)?
When the COVID-19 pandemic hit, the SBA offered all of the following types of funding:
- Paycheck Protection Program (PPP) loan;
- Economic Injury Disaster Loan (EIDL) program loan;
- Shuttered Venues Grant; and
- Restaurant Revitalization Fund money.
What kind of funding did you receive, and most importantly, do you need to repay it? PPP loans are loans that need to be repaid, but these loans can be forgiven. Accordingly, it is important to speak with a business lawyer about options for forgiveness if you have an SBA loan. Money from the Shuttered Venues Grant and Restaurant Revitalization Fund does not need to be repaid. The EIDL program provided two types of funding: Advance funds (like a grant, and do not need to be repaid), and EIDL loan funds, which do need to be repaid and are not eligible for forgiveness in the same way as PPP loans.
What You Can Do If You Need Help with Payments
Before you take any steps to defer or reduce the amount of your SBA loans, you should seek assistance from an experienced business lawyer in South Florida who can determine if your funding does not actually need to be repaid or, if not, whether you could be eligible to have an SBA loan forgiven. If you do owe money on an SBA loan, then that same West Palm Beach business law attorney can help you to seek a hardship accommodation that could reduce your EIDL loan payments for a set period of time.
Many businesses that borrowed SBA loans during the pandemic are realizing that their business income is insufficient to cover the total monthly cost that must be repaid on the loan. If your company is in this situation, you may be eligible for a hardship accommodation that could reduce your monthly payments. For the first and second 6-month period of a hardship accommodation, your EIDL loan payment could be reduced to just 10 percent of what you agreed to pay monthly. For the third 6-month period, your loan could be reduced to 50 percent of what you agreed to pay monthly. There is even an option for a fourth 6-month period where businesses pay 75 percent of the agreed-upon loan amount.
Contact a West Palm Beach Business Law Attorney Today
Do you have questions about SBA loans, including EIDL loan repayment? One of the experienced West Palm Beach business lawyers at Kelley Kaplan & Eller, PLLC can talk with you today about options that could be available to your business.
Sources:
ba.gov/funding-programs/loans/covid-19-relief-options
sba.gov/article/2024/01/05/small-business-administration-announces-further-action-help-ppp-covid-eidl-borrowers
