March 29, 2020
You may want to consider applying for this particular SBA loan program for any entity that has payroll costs. This loan will give you up to 2.5 times of your average monthly payroll and then look at your payroll, health insurance, rent and utilities cost for the 8 week period immediately after you receive the loan and if those costs exceed the loan amount, and you do not reduce salaries by more than 25% or lay anyone off, then the entire loan is forgiven. Even if you have let some staff go, if you bring them back by a certain date it will not count in the loan forgiveness calculations.
Basically the government is covering your payroll and partial rent for 2 months.
They do not consider any payroll in excess of $100,000 so you would just have to cap the payroll calculation for anyone in excess of that amount but you still get to include them in the calculation for the first $100,000 of salary.
Applications are available at any SBA Lender (check and see if your current bank is an approved lender as it’s always best to work with a bank where you have an existing relationship).
If you already applied for the Economic Injury Disaster Loan and you decide to apply for this loan then you must choose one loan or the other or use the proceeds from this loan to pay off the other loan.
We have not yet seen the application since the program just passed Congress on Friday, but our understanding is that this loan application is more streamlined than the typical SBA loan application so it’s much easier to complete.
As previously mentioned, we have a partnership with a law firm in the city that is helping out clients with the application (they bill you directly) if you cannot do it yourself.
You may want to watch this video to assist you.
The WZ team is available to assist you with any questions and guidance.
Stay safe and healthy,