Small Business Administration Offers Disaster Relief Loans to Nursery Owners

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Federal Disaster Loan Programs

Submit applications for Economic Injury Disaster Loans EIDL right now.

These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an Small Business Administration Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments.

For greater funds to keep and maintain existing employees see the Paycheck Protection Program to learn about applying beginning April 3, 2020. The Borrower Paycheck Protection Program Application will help you prepare before the date to get a jump on applying. This loan program will help maintain and keep existing employees.

Applications and instructions for both loan programs are at the Small Business Administration Coronavirus Resources Guide.

American Hort Webinar Series Explains the Loan Programs

AmericanHort has posted the webinar “A Discussion on the Coronavirus Aid, Relief, and Economic Security (CARES) Act – Loans, Grants and Business Relief from American Hort and helpful documents to learn about the CARES act to help small businesses learn about how to apply. Some notes from the webinar and information from the Small Business Administration are detailed below with links for greater understanding. There are also other economic webinars at the above link that are informative.

AmericanHort has also provided frequently asked questions in the Paycheck Protection Program FAQs that explains the program, eligibility, information required to file an application, and how to calculate the amount awarded roughly.

Notes from the above mentioned Webinar.

There were three stimulus bills thus far (3-31-2020). AmericanHort has provided a helpful Small Business Owners Guide to the Cares Act, which is highlighted some below.

Phase I: HR 6074 Corona is classed as a disaster. $7B program to rebuild economic damage. Economic injury disaster loans (EIDL) are now available to qualified recipents.

Phase II: 6201 Families first coronavirus response act mostly for families and workers.

Phase III; HR 748 CARES act $2T.

There were three stimulus bills thus far (3-31-2020)

Phase I: HR 6074 Corona is classed as a disaster. $7B program to rebuild economic damage. Economic injury disaster loans (EIDL).

Phase II: 6201 Families first coronavirus response act mostly for families and workers.

Phase III; HR 748 CARES act $2T.

$10B for Economic injury disaster loans (EIDL) loans not open to AG programs normally, but can participate now. Can take up to $2M.

$500B economic stabilization fund-airlines, national security, CEO compensation, etc., but not to paycheck protection program.

$9.5B to secretary of AG. Not know how fund will be used, to prepare for coronavirus. Mentions “specialty crops” as well as all other AG and schools. Unclear how the Sec. Ag. will use the fund.

$14B Commodity Credit Corporation.

There could be a fourth bill upcoming and Congress could expand the existing programs. Easy to imagine a future stimulus that expands these current programs.

Paycheck Protection

Small Businesses may be eligible for two types of loans from the Small Business Institute.

Economic Injury Disaster Loans (EIDL) for working capital for business overhead.

Paycheck Protection Program (PPP) loan based on payroll amounts, mortgage, interest to keep employees working.

Paycheck protection program, loan program with loan forgiveness, will probably become oversubscribed due to wide net cast. Get up to speed quickly on this program to see if you want to participate. You can apply, qualify for loans, but not take them, just to make sure you are in the queue and have time to decide on your business’s direction.

Funding for small businesses, ability to cover operating expenses, potential debt forgiveness.

Small Business qualifications

<500 employees at one location full time and part time and other basis for employment, or 501C3 nonprofit

Certification: COVID-19 impacted your business, funds will be used to make payroll and keep employees retained, and pay utilities and debts. Do not let go of any employees right now, keep them so they can get paid at least until June 30, 2020.

Maximum loan amount based on your maximum amount monthly average payroll for the last year X 2.5 or 10 million, or lesser of the two.

If you have another SBA loan depending on time it was submitted it may be rolled into this loan also, let them know when applying.

Payroll Costs included

Salary, wages, commissions, or tips cannot exceed 100K for any one person, and can include vacation, retirement, employee benefits. Does not include any salary >$100K. If employees principle place of residence is outside of the U.S. (e.g., H2A) does not count toward total salaries in the equation of how much the business can obtain.

Before 2/20/2020 Payroll costs, rent, mortgages, utilities only 25% can be used for non-payroll costs. They are saying prior to the start of the disaster declaration, only 25% of the amount awarded can be used for non-payroll costs.

Some of the loans awarded may be forgiven in the future since they are mostly to be used to keep the same number of employees employed between Feb 15-June 30 2019 and Feb 15–June 30, 2020. If some employees were laid off between those times and the number does not match, this can reduce the amount that is forgiven based on full time employees, salary reduction and if employees are laid off. Keep track for this new 8 week period (Feb to June 30, 2020), employee number needs to stay the same for the same period Feb 15 to June 30, 2019. If some employees were laid off between Jan1-Feb29, 2020, so the number does not match the same average number of employees as last year, you can hire back those employees and their salaries up until June 30, 2020.

Funds not forgiven will be termed out with a 0.5% interest. All payments deferred for 6 months. Waived normal loan/guarantee fees, no collateral, no personal guarantee.

Guidelines for eligibility from SBA for both Paycheck protection and Economic injury disaster loans (EIDL)

When to apply:

Start April 3, 2020 small business and sole proprietors can start applying. April 10, individual self-contractors can apply.

<500 employees, sole proprietor, individual, or tribal business concern are eligible to apply, and small AG cooperatives.

Repaying obligations that can’t be met due to revenue loss.

Can use the two loans together but not for the same thing. PPE for payroll and EIDL for working capital purchases.

Maxxed at $2M (PPE) but on a case by case basis and the formula of how it’s calculated is not available. Look at tax returns for one to three years.

EIDL at 3.75% for small business for 30 year max payback, could be less based on repayment capacity. No personal guarantee if <$200K, must be in operation for at least a year prior to disaster. You do not need a letter that says you cannot get a loan somewhere else. EIDL funds may not be eligible for forgiveness since they are intended for capital investments and not paycheck protection. If you are not awarded the Paycheck Protection Program loan, your business can use the Economic Injury Disaster Loans EIDL for up to $10,000 emergency to make payroll if >10 employees, if <10 employees then a different equation is used to determine the amount awarded for emergency grant, but that amount is forgiven.

The information contained within this bulletin can change at any time as new laws are passed, and guarantees change. Use it as reference, stay informed and let us know how we can help.