CPA: Small Businesses Need to “Get in Line” Now for Coronavirus SBA Loans
Businesses with under 500 employees can apply to receive a Small Business Administration loan from the feds to help cover payroll, and some other expenses for the next two months as businesses take a beating thanks to the worldwide coronavirus epidemic.
CPA Ben Vance, Consulting Director for Postlethwaite and Netterville, says businesses who qualify get a loan amount that is determined by the SBA.
“It is your monthly aggregate payroll costs for let’s say, 2019, times 2.5,” says Vance.
The funds can only be used for payroll, rent, utilities, and some interest costs, but Vance says it’s really intended to keep your workers employed.
“If you meet the requirements of maintaining payroll up to a certain extent, headcount and wages, you can get a portion of the debt forgiven,” says Vance.
The federal stimulus loans come in two forms, a disaster loan, and a payroll loan, but Vance says the emphasis is on payroll loans at the moment.
Vance recommends interested small business owners “get in line” to apply for the loans now because there’s a lot of interest.
“Talk to your CPA, talk to your banker, your payroll provider, whoever it is that is advising you through this making sure that you understand and are ready to go for whenever you are ready to apply,” says Vance.
The CPA also warns that this is only a temporary fix and business owners should be preparing for what will happen once the two month period ends.