SBA Administrator announces plans to elevate the Office of Women’s Business Ownership

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Earlier last week,  U.S. Small Business Administration Administrator Isabella Casillas Guzman announced that the SBA intends to elevate its Office of Women’s Business Ownership (OWBO) to directly report to the Office of the Administrator. The proposed change reflects the importance of women entrepreneurs held by the Biden-Harris Administration and SBA.

Established by Executive Order in 1979 and codified through the Women’s Small Business Act of 1988, OWBO’s mission has been to empower women entrepreneurs through advocacy, outreach, education, and support.

Under Administrator Guzman, the SBA has expanded the number of Women’s Business Centers (WBCs) to a record 140 locations nationwide. These WBCs offer a network of extensive on-the-ground resources that include free to low-cost counseling, training, business development technical assistance and are dedicated to assisting women entrepreneurs to start, grow, and expand their enterprises.

SBA, Isabella Casillas Guzman

SBA Administrator Isabella Casillas Guzman. (Photo Source)

“In 1972, there were a little over 400,000 women-owned businesses in the United States. Today, there are over 12 million proving that women entrepreneurs have become the fastest growing and one of the most impactful segments of the business community,” said Administrator Guzman in a press release. “While there has been historic progress in women’s entrepreneurship, significant disparities still persist, impacting women entrepreneurs’ access to resources and opportunity, especially in the face of the economic challenges posed by COVID. That is why I am proud to advance the mission of the Office of Women’s Business Ownership and reaffirm our commitment to America’s women-owned small businesses.”

This announcement comes after the release of the first-ever National Strategy on Gender Equity and Equality commissioned by the White House outlining objectives and priorities for obtaining equity for women. 

“Women entrepreneurs are key to spurring innovation and supporting local economies and families across the country. That is why it’s so important that we continue to invest in women-owned businesses and give them the tools they need to succeed and grow. The elevation of this office sends a clear signal of this Administration’s commitment to ensure an equitable economic recovery, putting women at the forefront of our efforts to build back better for everyone. The White House Gender Policy Council looks forward to an ongoing strong partnership with the Office of Women’s Business Ownership in the months and years ahead,” said Jennifer Klein, Deputy Assistant to the President and Co-Chair and Executive Director of the WH Gender Policy Council.

Women represent the fastest-growing entrepreneurial segment in the country, with particularly high growth in entrepreneurship amongst multicultural women. Data from the SBA’s Office of Advocacy found that between 2014 and 2016, the number of employer firms owned by women grew six percent, twice the growth rate of employer firms owned by men. This exponential growth was mainly driven by an increase in employer businesses owned by minority women, which grew 14 percent in that time.

Photo created by tirachardz on Freepik.

COVID-19 dealt a severe blow to women-owned businesses which is why prioritizing recovery and addressing long standing inequities for women entrepreneurs is crucial to the survival and continued growth of these businesses. The elevation of the Office of Women’s Business Ownership will help ensure the continued success of the Women’s Business Center network. 

While it is evident that women entrepreneurs play a key role in our society and economy, they still remain underrepresented in many key factors, including access to capital, contracts, and connections. Led by OWBO, the SBA assists women-owned businesses in leveraging government resources – including recently announced opportunities through an equitable federal procurement strategy, the Bipartisan Infrastructure Law, and the Build Back Better Act – to level the playing field. 

Currently, the OWBO is an organizational component of the Office of Entrepreneurial Development. The SBA emphasizes that the reorganization is still in the planning stages and likely will not be finalized until the close of fiscal year 2022.

To find Women’s Business Center locations and additional SBA resources in your area, visit www.sba.gov/tools/local-assistance.

National Entrepreneurship Day: Bounce back post-Covid with the Economic Injury Disaster Loan

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Today is National Entrepreneurship Day, an annual event that occurs on the third Tuesday of November to honor our nation’s entrepreneurs. 

Officially Established in 2010, then-President Barack Obama proclaimed the last day of 2010’s National Entrepreneur Week as National Entrepreneurship Day. 

In the past year, U.S. entrepreneurs have faced historic challenges in the face of the Covid-19 pandemic. Many businesses were forced to close, faced setbacks, and financial losses. However, we have also seen great hope and innovation during this time as entrepreneurs and business owners found ways to adapt and communities came together to help each other. Additionally, this time saw a boom of new businesses established during the pandemic. 

In a White House statement for the Proclamation of National Entrepreneurship Month 2021, President Biden said, 

“In the midst of the economic disruption caused by the pandemic, Americans started more than 4 million businesses last year, a 24 percent increase from the year before — the highest number of monthly business applications on record — and start-up rates growing the most among immigrants and Black, Latino, and Asian, Native Hawaiian, and Pacific Islander Americans.  This is important for our future success, as small businesses are the engines of our economic progress — and the heart and soul of our communities.” 

To help entrepreneurs and small business owners recover post-Covid, various programs have been established dedicated to providing aid and assistance. One program small businesses can benefit from to bounce back financially in the Covid-19 Economic Injury Disaster Loan (EIDL). 

Economic recovery for small businesses: COVID-19 Economic Injury Disaster Loan 

The COVID-19 EIDL is a federal small business loan program that supports small businesses’ recovery from COVID-19’s economic impacts by providing accessible and borrower-friendly capital. The program is open to small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories. 

“The SBA’s COVID Economic Injury Disaster Loan program offers a lifeline to millions of small businesses who are still being impacted by the pandemic,” SBA Administrator Isabella Casillas Guzman said in a press release. 

The loan comes directly from the U.S. Small Business Administration (SBA) and must be repaid. It is a low-interest, fixed-rate, long-term loan to help businesses overcome the effects of the pandemic by providing working capital to meet operating expenses. 

Proceeds can be used to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt incurred at any time (past, present, or future). 

Maximum Loan Amount: $2 million

Loan Term: 30 years

Interest Rate:

  • Businesses: 3.75% fixed
  • Private nonprofit organizations: 2.75% fixed

Payment Deferment: Payments are deferred for the first 2 years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. No penalty for prepayment.

For more information visit the SBA site.

How to Apply 

To be eligible, applicants must be physically located in the United States or designated territory and must have suffered working capital losses due to the Coronavirus pandemic. A comprehensive list of additional eligibility requirements can be found here. 

To apply, first-time COVID EIDL applicants should complete the following steps:

  1. Confirm eligibility 
  2. Complete Intake Form.
  3. Sign up to create portal username via SBA email invite.
  4. Complete portal steps and submit relevant documents.
  5. Respond to SBA requests for signature, confirmation, and documents.

You might be interested: Excluded New Jerseyans Fund to provide pandemic-related financial aid to undocumented individuals

All business owners who have received previous loans through the SBA’s Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF), or Shuttered Venue Operators Grant (SVOG) can still benefit from COVID EIDL. For no-cost assistance for the COVID EIDL program, and every other SBA program, go to www.sba.gov/local-assistance and connect with a local resource partner near you.

Business photo created by rawpixel.com - www.freepik.com'>women entrepreneurs

With over 13 million women-owned businesses, Women entrepreneurs are unstoppable

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Today, there are over 13 million women-owned businesses and women are starting businesses at double the national average rate, according to the 2019 State of Woman-Owned Businesses Report. Additionally, women of color make up the majority of new business owners, making them the fastest growing group of entrepreneurs. The month of October is National Women’s Small Business Month, which celebrates women-owned businesses and their effect on the country’s economy. 

In 1972, there were only 400,000 women-owned businesses and until 1988 women needed a male relative to co-sign business loans. Since then we have come so far. 

According to the 2019 report, women-owned companies grew 3.9% annually from 2014 to 2019, 2.2% more than all businesses at the time. By 2019, women-owned businesses represented 45% of all U.S. businesses and generated $1.9 trillion worth of revenue. Despite these great advancements, there are still many hurdles women entrepreneurs face when starting new businesses.

This week, from October 18 – 22, marks Women’s Entrepreneurship Week (WEW) where colleges and organizations across the country host events and share resources to help women entrepreneurs grow and succeed. Berkeley College is one of many institutions that will be hosting a WEW event. The virtual event, The Future is Women, will take place tomorrow, Tuesday, October 19 and will feature panels of diverse women leaders and entrepreneurs. See here more information and to register. 

(Image source: Berkeley College)

Additionally, the U.S. Small Business Administration  (SBA) offers plenty of resources for women business owners and entrepreneurs to help women entrepreneurs launch new businesses and compete in the marketplace.

The Office of Women’s Business Ownership is one branch within the SBA that specifically works to enable and empower women entrepreneurs through advocacy, outreach, education and support. Established in 1979, the Office of Women’s Business Ownership has fostered the participation of women entrepreneurs in the economy, especially those who have been historically under-served or excluded. It supports programs through each of the SBA’s 68 district offices, providing business training and counseling, access to credit and capital, and marketing opportunities.

Resources and further reading for Women Business Owners and Entrepreneurs 

Women have made tremendous leaps and bounds in the area of business and entrepreneurship in recent decades. With over 13 million women-owned businesses and counting and the fastest growing group of business owners, women are an unstoppable force. To continue to foster this growth, we must continue to share resources and support initiatives that support women entrepreneurs. Below are a few resources and articles for further reading to help women entrepreneurs get started and succeed. 

Good news for small business from the Economic Injury Disaster Loan Program

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The Small Business Administration (SBA) has announced improvements to the COVID Economic Injury Disaster Loan (EIDL) program to better meet the needs of small businesses, and industries hit hardest by the pandemic. With the Delta variant, the struggle is far from over and many small businesses across the country are still in need of financial relief.  

The COVID Economic Injury Disaster Loan program is on of many SBA programs offering assistance to businesses in need. The program is a federal disaster relief loan designed to better serve and support our small business communities still reeling from the pandemic, especially hard-hit sectors such as restaurants, gyms, and hotels. 

SBA Administrator Isabella Casillas Guzman. (Photo Source)

“The SBA’s COVID Economic Injury Disaster Loan program offers a lifeline to millions of small businesses who are still being impacted by the pandemic,” SBA Administrator Isabella Casillas Guzman said in a press release. 

“We’ve retooled this critical program – increasing the borrowing limit to $2 million, offering 24 months of deferment, and expanding flexibility to allow borrowers to pay down higher-interest business debt. We have also ramped up our outreach efforts to ensure we’re connecting with our smallest businesses as well as those from low-income communities who may also be eligible for the companion COVID EIDL Targeted Advance and Supplemental Advance grants totaling up to $15,000.  Our mission-driven SBA team has been working around the clock to make the loan review process as user-friendly as possible to ensure every entrepreneur who needs help can get the capital they need to reopen, recover and rebuild,” Guzman continued. 

The SBA is ready to receive new applications immediately from small businesses looking to take advantage of these new policy changes.

Changes to the COVID EIDL program

The low-interest and long-term COVID EIDL program has helped millions of small business owners survive the impacts of the pandemic with its flexibility and affordability – allowing entrepreneurs to hire and retain employees, and purchase needed equipment and inventory.  

The SBA’s newest improvements will make the program even more flexible to meet the needs of struggling business owners. New improvements include: 

  • The SBA has increased the amount of funding that can be borrowed from $500,000 to $2 million for qualified applicants.  
  • The SBA has authorized COVID EIDL funds to be used to pay and prepay commercial debt and make payments on federal business debt in recognition of the financial reality many small businesses are facing during this crisis.
  • Small businesses will have time to recover from COVID-19 impacts by further deferring payments – up to two years after your loan origination date. 
  • Additionally, to help ensure the smallest businesses can access this crucial capital, the SBA has created a one-month exclusive window for businesses requesting $500,000. During this time, approvals and disbursements will focus 100% on loans $500,000 or less until October 8th, upon which approvals and disbursements will be opened up to all loan sizes.
  • Finally, to ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.

You might be interested: How to still apply for Covid-19 Business Tax Credits ending Sept. 30

How to apply

Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. Visit www.sba.gov/eidl to learn more about eligibility and application requirements. The last day that applications may be received is December 31, 2021. All applicants should file their applications as soon as possible.

For additional information on COVID EIDL and other recovery programs please visit www.sba.gov/relief.

“As your SBA Administrator and a former small business owner myself, my goal is to make you, America’s small businesses, feel like the giants you are in our economy with programs that meet you where you are,” said Guzman.  

All business owners who have received previous loans through the SBA’s Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF), or Shuttered Venue Operators Grant (SVOG) can still benefit from COVID EIDL. For no-cost assistance for the COVID EIDL program, and every other SBA program, go to www.sba.gov/local-assistance and connect with a local resource partner near you.

SBA: How these cities support Latinx small businesses, J.Lo. fireside chat

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The SBA (U.S. Small Business Administration) Administrator Isabella Casillas Guzman announced today the full speaker slate for National Small Business Week, including entrepreneur Mark Cuban, Chef José Andrés, and White House Senior Advisor and Director of the Office of Public Engagement Cedric Richmond.  The National Small Business Week Virtual Summit takes place September 13-15, 2021.

 

Photo Credits: Mark Cuban (Wikimedia Commons – Gage Skidmore from Peoria, AZ, United States of America – Mark Cuban & Doug Ducey) –  Jennifer Lopez (Wikipedia Commons dvsross – Jennifer Lopez at GLAAD Media Awards.jpg) – Jose Andres (Wikimedia Commons David Shankbone – Own work José Andrés Puerta at the 2012 Time 100 gala.)

The theme for this year’s event is Celebrating Resilience and Renewal, spotlighting the resilience of America’s entrepreneurs and the renewal of the small business economy as they build back better from the economic crisis brought on by the pandemic.

Administrator Guzman will kick off National Small Business Week with an opening address on September 13. In addition to this and the new keynote speakers, other panelists and participants will include Mayor Eric Garcetti, Los Angeles, Calif.; Mayor Steve Adler, Austin, Texas; Mayor Regina Romero, Tucson, Ariz.; Mayor Lori E. Lightfoot, Chicago, Ill.; Tarik Brooks, President of Combs Enterprises, and Oisin Hanrahan, Chief Executive Officer of Angi.

Here’s how you can participate:

Photo of Jennifer Lopez

Register for the National Small Business Week Virtual Summit, September 13-15 for business tips, chat with other small business owners and connect with industry experts.

Also, hear from guest speaker Jennifer Lopez as she joins Administrator Isabella Casillas Guzman for “Pathways to Entrepreneurship: A Fireside Chat” on Tuesday, September 14.

For more information, see the Virtual Summit agenda.

Photo credit SBA

NSBW Virtual Summit Speakers Line up

Monday, September 13 – “Getting Back on Track: Resources to Build Back Better”

  • Opening Keynote Address by: Isabella Casillas Guzman, SBA Administrator (11-11:30 a.m. EDT)
  • Keynote Address by: Cedric Richmond, White House Senior Advisor and Director of the Office of Public Engagement (11-11:30 a.m. EDT)
  • Keynote Address by: Mark Cuban, Entrepreneur (11-11:30 a.m. EDT)
  • “Life after COVID – A Fireside Chat with SBA Administrator Isabella Casillas Guzman and Restaurateur Chef José Andrés”- José Andrés, Chef, Restaurateur and Founder of World Central Kitchen (12:40-1:10 p.m. EDT)

Tuesday, September 14 – “Better Serving Small Businesses and Underserved Communities”

  • “Support Latino Biz: How these Mayors are Leading the Way” – (3:40-4:40 p.m. EDT)
    Participants: Mayor Eric Garcetti, Los Angeles, Calif.; Mayor Steve Adler, Austin, Texas; Mayor Regina Romero, Tucson, Ariz.; Mayor Lori E. Lightfoot, Chicago, Ill.
    Moderator: Antwaun Griffin, Chief of Staff for the SBA
  • Special Remarks by: Tarik Brooks, Chief Operating Officer of Combs Enterprises, will speak on the importance of Black and Brown communities coming together to support each other. (4:45-5:00 p.m. EDT)

Wednesday, September 15 – “Continuance to Support Resilience and Renewal”

  • Special Remarks by: Oisin Hanrahan, Chief Executive Officer of Angi (formerly Angie’s List), will share small business experiences as well as trends and insights on how Angi has maneuvered through the pandemic and positioned for the future.

Biographies for Keynote Speakers

Cedric Richmond: White House Senior Advisor and Director of the Office of Public Engagement
Cedric Richmond is an attorney and former Democratic Congressman for Louisiana’s 2nd Congressional District from 2011-2021. Richmond now serves as senior advisor to President Biden and director of the White House Office of Public Engagement.

Mark Cuban: Entrepreneur
Mark Cuban is an entrepreneur, television personality, and media proprietor. He is the owner of the Dallas Mavericks professional basketball team of the National Basketball Association, co-owner of 2929 Entertainment, and chairman of AXS-TV. He is also one of the main “shark” investors on the hit ABC reality TV series “Shark Tank.”

José Andrés: Chef, Restaurateur, and Founder of World Central Kitchen
José Andrés is a chef, restaurateur, and founder of World Central Kitchen, a non-profit devoted to providing meals in the wake of natural disasters.  He is often credited with bringing the small plates dining concept to America. He owns restaurants in Washington, D.C.; Los Angeles, Calif.; Las Vegas, Nev.; South Beach Miami and Orlando, Fla.; Chicago, Ill., and New York, N.Y.  Andrés received the National Humanities Medal at a White House ceremony in 2016. In 2018, Andrés’ World Central Kitchen provided meals to furloughed federal employees during the federal government shutdown.

You might be interested: Isabella Casillas Guzman confirmed as new SBA Administrator, a big win for small businesses 

Administrator Guzman announced National Small Business Week 2021 in a news release last month. The free, three-day conference will take place in a virtual atrium, which will showcase a series of educational panels on best practices for small businesses to pivot and recover in a changing economy. NSBW events this year will also provide a forum where business owners will be able to get expert advice, learn new business strategies, connect with industry experts, and meet other business owners as they look to pivot and recover. Additional speakers will be announced. Details and information will be posted on https://www.sba.gov/NSBW  as events are finalized.

To register for the National Small Business Week Virtual Summit and participate in summit workshops, please visit http://www.sba.gov/NSBW. All events will be live-streamed and will use the event hashtag #SmallBusinessWeek.

National Small Business Week delivers virtual summit for post-COVID renewal resources

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National Small Business Week commences with three-day free virtual summit from September 13 – 15, 2021. 

Hosted by the U.S. Small Business Administration (SBA), virtual summit will focus on the resilience and renewal of small businesses as they build back from the economic crisis brought on by the COVID-19 pandemic. 

Photo by Sigmund on Unsplash

The National Small Business Week virtual summit will feature a variety of virtual events and activities including educational panels providing tools and practices for entrepreneurs and small businesses looking to pivot and recover post-COVID. With panels such as “The Importance of Black and Brown Community: Coming Together to Support Hispanic Heritage Month, Black History Month, and Small Business Day”, “Empowering the Veteran and Military Small Business Community”, “Unlocking the Doors to Access for Black-Owned Businesses: Funders and Founders Share Their Real-Life Stories” and more on the agenda, the diverse and inclusive summit offers resources and tools to support all business owners expand and succeed. 

Register now for the free three-day virtual summit. 

SBA Administrator Isabella Casillas Guzman. (Photo Source)

“Over the last 16 months, we have seen the incredible determination and ingenuity of small businesses across the nation.  During NSBW, we will honor and celebrate their impact on our economy and strengthening of communities as we look towards recovery,” said SBA Administrator Isabella Casillas Guzman in a video message. 

As the 27th Administrator of the U.S. Small Business Administration, Guzman represents the more than 30 million U.S. small businesses and is committed to helping small business owners and entrepreneurs start, grow and be resilient. 

The SBA works to empower entrepreneurs and small business owners by providing the resources and support they need to start, grow or expand their businesses, or recover from disaster. The organization delivers services through its extensive network of SBA field offices and partnerships with public and private organizations. 

You might be interested: Latina Leaders share small business post-Covid recovery resources 

“NSBW is the perfect time for small businesses across the nation to network and learn about the many services and programs at the U.S. Small Business Administration, including our no-cost business counseling and mentoring opportunities available via our district offices and resource partners. We look forward to celebrating with you as we rebuild our economy and help our small businesses build back better,” Administrator Guzman added. 

About SBA

The U.S. Small Business Administration (SBA) works to ignite change and spark action so small businesses can confidently start, grow, expand, or recover. Created in 1953, the U.S. Small Business Administration continues to help small business owners and entrepreneurs pursue the American dream. SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.

loans for Latina entrepreneurs

Second round of PPP loans: Why you should act now and where to go

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The U.S. Small Business Administration (SBA) announced that the Paycheck Protection Program (Second Round of PPP loans) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.

If you wish to begin preparing your application, you can download the following PPP borrower application forms to see the information that will be requested from you when you apply with a lender. Contact your local lender today!

second round of PPP loans

The second round of PPP loans will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.

This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.

“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza.  “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”

“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin.  “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19.  We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”

Why you should act now: 

  • PPP borrowers can set their second round of PPP loans’ covered period to be any length between 8 and 24 weeks to best meet their business needs;
  • PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
  • The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, destination marketing organizations, among other types of organizations;
  • The PPP provides greater flexibility for seasonal employees;
  • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
  • Certain existing PPP borrowers are now eligible to apply for a Second round of PPP Loans.

Who is eligible for this second round of PPP Loans:

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

You might be interested: 2021 Update to PPP loans and Employee Retention Tax Credit

loans for Latina entrepreneurs

Who can benefit the most with this round:

To efficiently and effectively implement the Economic Aid Act and to ensure increased access to PPP for minority, underserved, veteran, and women-owned business concerns, SBA is undertaking the following steps:

  • Accept PPP loan applications only from community financial institutions for at least the first two days when the PPP loan portal re-opens;
  • Direct Lender Match borrower inquiries to small lenders who can aid traditionally underserved communities;
  • Match small businesses through Lender Match with Certified Development Companies (CDCs), Farm Credit System lenders, microloan intermediaries, and traditional smaller asset size lenders;
  • Continue setting aside dedicated hours to process and assist our smallest PPP lenders with their PPP loans;
  • Continue to strongly encourage CDFIs and minority-, women-, veteran-, and military-owned lenders to apply to become PPP lenders.

SBA will give full and prompt consideration to these applications to become PPP lenders consistent with program guidelines, including in cases where the lender does not meet all of the requirements listed on the updated SBA Form 3507.

Talk to your financial institution about this opportunity to quickly prepare your documents. We can also help with filling out your forms if you contact us at hello@latinasinbusiness.us 

additional paycheck protection program

Additional Paycheck Protection Program Loan (PPP) calculation for small business

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Attention: Additional Paycheck Protection Program applications will be accepted by the SBA from participating lenders on Monday, April 27, 2020 at 10:30am EDT. Contact your financial institution right away!  If you need help, contact us at hello@latinasinbusiness.us/

(Photo credit Kelly-Sikkema-unsplash)

With the additional Paycheck Protection Plan funding provided by the new COVID-19 relief package, SBA will resume processing EIDL Loan and Advance applications that are already in the queue on a first come, first-served basis.

We will provide further information on the availability of the EIDL portal to receive new applications (including those from agricultural enterprises) as soon as possible.

This past week, an additional Paycheck Protection Program and Health Care Enhancement Act (let’s call it “CV3.5”) was approved by both houses and signed by the Presdeint. This new bill provides additional federal funding for small business programs and healthcare, including:

  • $60 billion in new SBA Paycheck Protection Program funding dedicated to small lenders and community-based financial institutions. These will directly help underserved small businesses and nonprofit organizations with a specific focus on rural, minority, and women-owned businesses.
  • $50 billion for the SBA’s Economic Injury Disaster Loan program.
  • $10 billion for the SBA’s Emergency Economic Injury Grant program.
  • $75 billion in emergency money for our healthcare system.
  • $25 billion in funding for testing and contact tracing capabilities.

Hanna Mori, Esq., State Director for U.S. Senator Cory Booker (Photo Courtesy Hanna Mori)

“Despite the successes in this bill, including $220 billion in additional funding that Senator Booker and his colleagues secured by forcing Leader McConnell to the negotiating table, we are still pushing for an additional stimulus bill to allocate funding to states and local governments who have been hardest hit by COVID-19, fix the regulatory framework of the SBA programs, and make sure money is going directly to individuals and families who are in desperate need,” said Hanna Mori, Esq., State Director for U.S. Senator Cory Booker.

Additional Paycheck Protection Program Loan Information

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.

How to calculate maximum loan amounts – by business type

additional paycheck protection program

(Photo Credit Kelly-Sikkema-unsplash)

The Small Business Administration (SBA), in consultation with the Department of the Treasury, is providing this guidance to assist businesses in calculating their payroll costs for purposes of determining the amount of a Paycheck Protection Program (PPP) loan businesses can apply for.

Borrowers and lenders may rely on the guidance provided in this document as SBA’s interpretation of the CARES Act and of the Paycheck Protection Program Interim Final Rules. The U.S. government will not challenge lender PPP actions that conform to this guidance1 and to the PPP Interim Final Rules and any subsequent rulemaking in effect at the time.

  1. Question: I am self-employed and have no employees, how do I calculate my maximum PPP loan amount? (Note that PPP loan forgiveness amounts will depend, in part, on the total amount spent during the eight-week period following the first disbursement of the PPP loan.)

Answer: The following methodology should be used to calculate the maximum amount that can be borrowed if you are self-employed and have no employees, and your principal place of residence is in the United States, including if you are an independent contractor or operate a sole proprietorship (but not if you are a partner in a partnership):

  • Step 1: Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount (if you have not yet filed a 2019 return, fill it out and compute the value). If this amount is over $100,000, reduce it to $100,000. If this amount is zero or less, you are not eligible for a PPP loan.
  • Step 2: Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).
  • Step 3: Multiply the average monthly net profit amount from Step 2 by 2.5.
  • Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL)

made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

Your 2019 IRS Form 1040 Schedule C must be provided to substantiate the applied-for PPP loan amount. You must also provide a 2019 IRS Form 1099-MISC detailing nonemployee compensation received (box 7), invoice, bank statement, or book of record establishing you were self-employed in 2019 and a 2020 invoice, bank statement, or book of record establishing you were in operation on February 15, 2020.

For additional information on how to calculate your specific loan situation, go there: How to Calculate Loan Amounts

You might be interested: COVID-19 Resources for minority and women small businesses

Apply for jobs at the SBA.gov

SBA.gov

financial assistance, Women's March on Washington

State by state financial assistance in response to harsh requirements for SBA loans

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State by state financial assistance seems to be the only hope in this moment of COVID-19 crisis. The SBA loans harsh requirements are selective of which businesses are going to survive and which are going to close their doors forever. The real answer seems to be coming from state legislations and how each state government evaluates the needs of its constituents.

The NJ EDA is asking all small businesses to urgently participate in a survey to help make quick decisions on how to allocate funding. Fill out the survey at the end of the article if your business is in New Jersey.

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The Economic Injury Disaster Loans are no different from any other SBA response: good credit, collateral and ability to repay, in addition to a max 3.75% interest rate, are required in a moment in which uncertainty of the COVID-19 pandemic’s economic impact is the number one concern small businesses face.

This economic impact is not measurable in the way a natural disaster would be. There is not end in sight, and when it ends, there is no certainty of how long it would take for businesses to recover.

Other state bills are asking for more comprehensive financial assistance

In contrast, House Small Business Committee Chairwoman Nydia M. Velázquez (D-NY) introduced the COVID–19 Relief for Small Businesses Act of 2020, comprehensive legislation that would provide relief to small businesses facing consequences from the ongoing COVID-19 outbreak.

financial assistance

Congresswoman Nydia M. Velázquez (D-NY)

“After speaking with my Committee colleagues and hearing firsthand of the struggles facing countless small businesses due to the coronavirus pandemic, I am introducing sweeping legislation to tackle the economic hardship and fallout facing our nation’s employers and workers,” said Chairwoman Velázquez. “This bill offers across the board solutions from channeling capital to small businesses in need by providing zero-interest direct loans, grants, and loan debt relief, to increasing access to federal contracts, and equipping entrepreneurial development centers with the technology they need to serve entrepreneurs remotely.”

Key components of the bill include:

  • The creation of an SBA Business Stabilization Direct Loan Program that authorizes $100 billion to offer interest-free loans with up to 50% loan forgiveness to qualified employers.
  • The authorization of $100 billion to provide up to $100,000 in direct grants for small businesses impacted by COVID-19. These grants would be targeted to businesses that have had to close their doors temporarily due to the outbreak.
  • Immediate loan debt relief to current and new SBA borrowers.
  • Expediting and streamlining the SBA’s economic injury disaster loan program to ensure small businesses can access cash easier and faster.
  • The authorization of additional grant funding to allow SBA resource partners to ensure they can provide education and marketing materials to educate small business customers on the public health emergency and steps to protect the business and maintain operations.
  • Amending several contracting provisions to provide more opportunities for small businesses affected by the outbreak to quickly and efficiently be awarded government contracts.

Now compare these options with the actual SBA Economic Injury Loans:

To be eligible for EIDL assistance, New Jersey-based small businesses or private non-profit organizations must have sustained economic injury, as well as being located in a disaster-declared county or contiguous county, which all New Jersey counties currently are.

Credit Requirements

  • Credit History – Applicants must have a credit history acceptable to SBA.
  • Repayment – Applicants must show the ability to repay the loan.
  • Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available.
  • SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available
  • The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 3.750 percent.
  • The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term.

lack of access to capital

In any case, we will have to wait and see how the response is state by state.

The problem is, families depending on their employers and small business owners themselves don’t have much time to wait. Thousands of small business have been force to close due to the quarantine.

The NJ Economic Development Authority  in partnership with the Office of the Governor of New Jersey, is working to develop programs and resources to support New Jersey’s business community during the COVID-19 outbreak.

SMALL-TO-MEDIUM ENTERPRISE (SME) FINANCIAL ASSISTANCE SURVEY

They’re seeking information from small-to-medium enterprise owners and leaders to inform the development of new programs and initiatives to support organizations during the COVID-19 outbreak.

The survey can be accessed at this link: https://www.surveymonkey.com/r/CVSupport.

They are trying to generate responses quickly as they will use this information to guide the development of short-term support that will be launched imminently.

You might be interested: Beyond COVID-19: Be proactive about your business cash flow

SBA Loan applications

If you want to take the plunge, here are the different ways the SBA is accepting applications. And good luck trying to enter the website!

Applicants may apply online, receive additional disaster assistance information and download applications at disasterloan.sba.gov/ela.

Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339.

Completed financial assistance applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155

Technical Assistance for Applying for SBA EIDL Loans

The State of New Jersey is currently developing plans to offer technical assistance to businesses that wish to apply for SBA disaster loans. As new information about these resources become available, it will be posted here.

Updated: March 20, 2020
Source: SBA Disaster Assistance in Response to the Coronavirus