RENO — In response to the COVID-19 pandemic that continues to threaten local economies across the country, the U.S. Small Business Administration has increased efforts to alleviate the hardship experienced by small businesses.
While the situation is evolving rapidly
and new information continues to be shared with local U.S. Small Business
Administration affiliates, the Nevada Small Business Development Center is
offering information about U.S. Small Business Administration Economic Injury
Disaster Loans, the Paycheck Protection Program and the U.S. Small Business
Administration Debt Relief Program.
Economic Injury Disaster Loan – EIDL
This is the primary loan offered by the U.S. Small Business Administration and allows qualifying entities to borrow up to $2 million at 3.75% interest for small businesses and 2.75% interest for non-profit organizations with terms up to 30 years.
All Nevada counties have been
declared eligible for EIDL. Eligible industries include but are not limited to:
restaurants, retailers, souvenir shops, travel agencies, wholesalers, owners of
rental property, hotels, recreational facilities, charter boats, manufactures
and sports vendors; sole-proprietors, independent contractors, gig-economy
workers and self-employed individuals are also eligible to apply.
This loan also allows small businesses the opportunity for a $10,000 quick cash-infusion advance. The advance can be distributed one to three days after the completion of the EIDL. The business owner can keep these funds regardless of the approval of the EIDL, and this advance will be forgiven. The loan funds may be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred.
An EIDL is not intended to replace
lost sales or profits or for expansion. The U.S. Small Business Administration
will view credit history and your ability to repay the loan and will expect
collateral, if available, though it is not required for funding less than
Businesses with existing U.S. Small
Business Administration disaster loans may apply for the EIDL, but the loans
may not be consolidated. The U.S. Small Business Administration has implemented
automatic deferment for all existing Small Business Administration Disaster
Loans through Dec. 31 2020.
Nevada businesses can apply for the
Economic Injury Disaster Loan at covid19relief.sba.gov.
Paycheck Protection Program – PPP
The Paycheck Protection Program provides small businesses with one 0.50% interest loan to pay up to eight weeks of payroll costs (100% federally guaranteed through Small Business Administration local lenders).
Payroll costs include all costs of an employee – salary or wages, commissions, bonuses, health insurance, retirement contributions, and local and state payroll taxes – but cannot be used to compensate anyone in excess of salary based on $100,000 per year, those residing outside the U.S. or those already getting reimbursed for paid sick/family leave under the act passed two weeks ago. PPP funds can also be used to pay interest on mortgages, utilities and rent. This loan will be forgiven if staff and payroll are maintained.
At least 75% of the forgiven amount
must have been used for payroll. Borrowers should be prepared with payroll
documentation before applying for this loan.
Small businesses with 500 or fewer
employees — including nonprofits, veterans’ organizations, tribal concerns,
self-employed individuals, sole proprietorships, and independent contractors –
are eligible for PPP, while businesses with more than 500 employees are
eligible in select industries.
Loan amounts may be up to 250% of
average monthly payroll for the previous year, and payments will also be
deferred for six months. No collateral or personal guarantees are required.
Neither the government nor lenders will charge small businesses any fees.
Businesses will owe money when the loan is due in two years if PPP funds were
used for anything other than payroll, mortgage interest, rent or utilities
Starting April 3, , small businesses and sole proprietorships can apply. Starting April 10independent contractors and self-employed individuals can apply. Early application is encouraged because there is a funding cap and lenders will need time to process loans.
Small Business Debt Relief Program
Under this program, the U.S. Small
Business Administration will cover all payments on existing non-disaster U.S.
Small Business Administration loans, including principal, interest and fees for
six months. This relief will also be available to borrowers who take out U.S.
Small Business Administration loans within six months of March 27, 2020.
“Please be wary of scammers during
this time,” said Sam Males, state director for the Nevada Small Business
Development Center. “The U.S. SBA will not ask for money to complete a loan
application and will NOT ask for personal information over email. All personal
information is collected through U.S. SBA’s secure online portal. When in
doubt, contact U.S. Small Business Administration’s Disaster Office for
confirmation of any requests you receive.”
Contact the U.S. Small Business
Administration Disaster Office at 1-800-659-2955 or
For information on U.S. Small
Business Administration Disaster Lending and other disaster resources for small
businesses in Nevada, call 1-800-240-7094, or visit nevadasbdc.org.
“Details on the CARES funds
continue to evolve,” Males said. “If you’re unsure what course of action would
be most beneficial to your small business or if you have questions, sign up for
no-cost, confidential counseling with the experienced Nevada Small Business
Development Center professionals at nevadasbdc.org.”