Is COVID-19 Killing Your Small Business?

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It’s Not Pretty Out There!

No one saw it coming that COVID-19 would be killing your small business today.  And, no one imagined how disruptive it would be or how long it would go one for as we are about to enter November 2020.  (Updated Oct. 29, 2020)

No one could anticipate the turmoil that this devastating virus would cause to everyone, both personally and financially.

killing your small business

One of the largest financial hardships, of this crisis, was felt by the Small Business sector.

 Small businesses make up 44% of the U.S. Economy.

As of August, 31, 163,735 businesses have indicated on Yelp that they have closed. (According to a CNBC story.) That’s in addition to the orinally 180,000 that closed at the beginning of the Covid-19 shutdowns.

*96% of small business owners are feeling coronavirus impact…

There are some small businesses that are thriving out there during the Covid-19 pandemic crisis as well. (Small grocery stories, businesses related to real estate and computers, working online, etc.)

One of the largest financial hardships,  of this crisis, was felt by the Small Business sector. #smallbusiness #smallbiz Click To Tweet

Paycheck Protection Loan Forgiveness

Today you can apply for Paycheck Protection Loan Forgiveness.

If your loan is below $50,000, the SBA released a new form on October 8th that we are working to add to our process. If you do not think you will qualify for 100% forgiveness using form 3508EZ, please wait to apply for forgiveness until we incorporate this new form as it does not penalize forgiveness for reductions in headcount or wages.

Only users who signed the PPP note will initially be given access to the forgiveness portal. If you need additional users to have access, please email CARES@congressionalbank.com.

The online application will fill out a PDF application for you, ensuring the correct calculations are made. They will also ask for supporting documentation for the expenses listed on your forgiveness application. You will then be asked to sign the completed form so that we can submit the final version to the SBA for their review.

Per SBA regulations, banks have 60 days to review forgiveness requests and the SBA then has 90 additional days to provide a final decision. Borrowers will be notified of progress as their application moves through different stages.

Read more here about the foregiveness program.

If your loan is below $50,000, the SBA released a new form on October 8th that we are working to add to our process. #smallbusiness Click To Tweet

Other Help may be on the Way if Covid-19 is Killing Your Small Business

Economic relief was rolled out early on in the form of Small Business Administration (SBA) Loans and new stimulus packages were rolled out as the crisis continued.

Today talks are still going on for another stimulus package. Time will tell if a package will be voted on or passed this year.

The Federal Reserve is encouraging banks to lend to struggling businesses and to extend debt payments, for those that need it.

economic relief

Applying for a small-business loan can be a major hurdle facing the small business owner.

However,  it doesn’t have to be difficult, if you are prepared before you apply.

Steps Towards a Successful Business Loan Application

Ask yourself, why do I need this loan?

That is the primary question on the loan application.  Lenders want to know exactly what you plan to do with the money.  Will it be for to catchup on overdue bills incurred from the crisis?

Finally, will it be to cover the day-to-day expenses? The more specific you are when describing your loan purpose, the better the lender can serve your needs.

Decide which type of loan is right for you.

Your reasons for needing the loan will dictate the type of small-business loan you get. If

However, if your business is a year old or more, and you have revenue history, you have more financing options.  You could apply for a  Small Business loan, a  term loan, or perhaps a business line of credit loan.

Currently, you may also be eligible for some “economic injury disaster loan options” currently available,  during this time of crisis, such as the Paycheck Protection Program.

Determine the best type of small-business lender.

You can get small-business loans from several places. Then, you can apply with the SBA, your local  bank, a credit union, a nonprofit micro-lender or an online lender. These lenders offer products such as term loans, lines of credit and accounts receivable financing.

You should approach small-business-loan shopping just as you would shopping for a car.

Once you determine which type of lender and financing vehicle are right for you, compare two or three similar options based on annual percentage rate (total borrowing cost) and terms.

Of the loans you qualify for, choose the one with the lowest APR, as long as you are able to handle the loan’s regular payments.

You can get small-business loans from several places. Then, you can apply with the SBA, your local  bank, a credit union, a nonprofit micro-lender or an online lender. #SBA Click To Tweet

Find out if you qualify.

Know your credit score! It is THE ONE MOST IMPORTANT FACTOR that will determine which loans you’ll qualify for.

You can get your credit report for free from each of the three major credit bureaus — Equifax, Experian and TransUnion — once a year.

Banks or Credit Unions offer the least expensive small-business loans. They favor  borrowers with credit scores at least above 680.

Lenders will determine your interest rate based on 3 other major factors as well – but not limited to — How long you have been in business, Your previous net business income and your debt-to-income ratio.

This information is used to determine if you can afford the payments.

Know your credit score! It is THE ONE MOST IMPORTANT FACTOR that will determine which loans you’ll qualify for. #SBA #smallbiztips Click To Tweet

Gather your Documents.

Once you’ve compared your options, it’s time to apply for the loan that fits your financing needs and those that you qualify for.

You can apply for multiple small-business loans within a short time frame (about two weeks) without a negative effect on your personal credit score.

Depending on the lender, you’ll need to submit a combination — but not limited to —the following documents  with your application:

  • Business and personal tax returns
  • Or business and personal bank statements
  • And business financial statements

Business legal documents (e.g., articles of incorporation, commercial lease, franchise agreement).

gather your documents
You can apply for multiple small-business loans within a short time frame (about two weeks) without a negative effect on your personal credit score. #SBA #smallbiztips Click To Tweet

The United States Chamber of Commerce to the Rescue?

The US Chamber of Commerce has recently come up with a new online resource center with funding programs, resources, and guidance for small businesses struggling from the pandemic and waiting for Congress to provide further financial relief.  

It is called Save Small Business and you can visit their website today for more information.

The Chamber of Commerce website does break down state by state with the programs available at the state level. A very informative website to visit for your small business if you need help!

The US Chamber of Commerce has recently come up with a new online resource center with funding programs, resources, and guidance for small businesses  #smallbiztips Click To Tweet

In Conclusion of the Covid-19 Killing Your Small Business

Is the Covid-19 crisis killing your small business today? How has your business been surviving if it has?

I’d love to know more in the comments below.

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Lisa
 

Lisa Sicard has been running Inspire To Thrive for over 9 years. She helps companies manage their social media as well as providing training and consultations. She has over 25 years of digital marketing experience and helped many small businesses grow.

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