On Friday, April 3, potentially millions of small businesses in the United States will begin submitting applications for SBA loans stemming from the $2.2 trillion CARES Act economic stimulus package.
Specifically, businesses will be vying for the $350 billion in government-guaranteed loans that are designed to cover eight weeks of payroll and other expenses such as rent and utilities. Portions or all of these Paycheck Protection Program loan amounts can be forgiven for businesses that are able to prove losses due to COVID-19.
As independent lenders will begin processing Paycheck Protection loans on a first-come, first-served basis, many coffee business owners are scrambling to fill out the latest version of the application form.
It should be noted that the U.S. Treasury Department has also been scrambling to fast-track the stimulus package (the application form itself is unbelievably called “FA$TRAK”), leaving the various deadlines, lender requirements, payout dates and more at risk of changing at a moment’s notice.
As of this writing, the application enrollment period for small businesses and sole proprietorships was expected to begin Friday, April 3, while the application enrollment period for independent contractors and self-employed individuals was expected to begin Friday, April 10.
Paycheck Protection Program loans do not prevent small businesses from also applying for or receiving COVID-19 disaster relief loans, which are available to small businesses for up to $2 million, including a potential cash advance of up to $10,000.
The U.S. National Coffee Association has amassed a wealth of resources for U.S. small business owners, particularly those in the restaurant and retail sectors, related to COVID-19 regulations, requirements and more.
For coffee businesses seeking financial relief or options, DCN highly recommends visiting two recent additions to the NCA’s Covid-19 resource FAQ page, under the “Employee Health and the Workplace” header: “I’m a Small Business Owner Experiencing a Loss of Revenue Due to COVID-19. What Are My Options?” and “Are There Any New Requirements for Giving Paid Leave to My Employees?”
Regarding the Paycheck Protection Program loans, here are answers to two of the most pressing questions coming from small coffee businesses right now:
Am I eligible?
From the SBA:
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.
Larger coffee retailers with more than 500 employees may also apply, so long as they have no more than 500 employees at a single location. Here’s more from the SBA:
Small businesses in the hospitality and food industry with more than one location could also be eligible at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.
How Do I Apply?
Not all banks are participating in the loan program, which is currently limited to SBA 7(a) banks and federally insured depositories. Here’s a current list of the most active SBA 7 lenders. From the SBA:
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.