Submitted by Joel Shabsin, CPA

Today, June 16, 2020, the SBA reopened the EIDL loan for businesses that are affected by the Corona virus. As the SBA received loan applications from businesses they quickly reached the limit for the original funds appropriated by Congress. But a lot of businesses decided not to accept the loans even though they received grants they did not have to return. As a result, there are still funds available for businesses that are experiencing financial difficulties as the economy slowly reopens. The EIDL application can be found on the SBA website.

The SBA also announced recently that there was still $131 billion available for PPP loans. The PPP loan application process is set to close on June 30, 2020 so if you have clients who are in need of financial assistance, they need to apply at their bank or any other SBA authorized lender.

As a reminder, the EIDL loan comes with a $1,000 per employee tax free grant that businesses automatically receive shortly after their application, with supporting documents, is received by the SBA. The SBA takes between 30-45 days to do their due diligence and once approved, the funds are simply deposited in the borrower’s bank account. Loan terms have a 30 year payback period with interest at 3.75% per year. There is no early prepayment penalty, so it makes sense to apply for the loan if your client qualifies.

The PPP loan is a forgivable loan that may never have to be repaid if funds are used properly. Congress just made it easier to get forgiveness with recent legislation. The amount a business can borrow is based on pre-virus payroll or 2019 earnings for self employed individuals.

You can add value to your clients by helping them through the application process. But remember, you are not allowed to charge them for this service.