Last edited: 4-25-2020
First and foremost, from all of us at Awakon Federal Credit Union, we hope you, your families, colleagues, and communities are staying safe and healthy as we go through this crisis together.
We have been receiving an unprecedented amount of calls, emails and texts from local business owners asking for additional information regarding various government backed assistance programs. Currently, there are 4 programs that impact small businesses through the SBA as it relates to the CARES Act; Economic Injury Disaster Loans (EIDL), Economic Injury Disaster Loan Advances (also referred to as Economic Injury Disaster Grants (EIDG)), Paycheck Protection Program (PPP), and the Small Business Debt Relief. Additionally, the State of Michigan has created Strategic Fund Aid to assist small businesses within the state. In order to assist you in determining which program best fits your business needs, Awakon has outlined the important information you will need to know below and how you’re able to apply for each loan.
PLEASE NOTE THAT ALTHOUGH THE LEGISLATION IS SIGNED, THE SBA HAS 30 DAYS TO RELEASE THE FINAL RULINGS/GUIDELINES ON THE PROGRAM SO EVERYTHING IS SUBJECT TO CHANGE. As of Friday, April 24, 2020, the Federal Government appropriated additional funds to the EIDL/EIDG fund.
Application Tip: It is recommended by the MCDC that small business owners would be well served to apply for an Economic Injury Disaster Loan (EIDL) first in lieu of a PPP loan. The particulars of the EIDL are below AND you receive the added benefit of possibly receiving an EID Grant of $10,000 simply for applying.
– Economic Injury Disaster Loan (EIDL)
o Loans up to $2,000,000 with a fixed interest rate up to 3.75% for businesses and 2.75% for private non-profits. Loan term up to 30 years.
o The loans are for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
o May still apply for a Paycheck Protection Program (PPP) loan or refinance into a PPP loan but the requested loan amount would be reduced by the $10,000 EIDG and the PPP and EIDL for the same purposes.
o Additional information on EIDLs- https://www.sba.gov/disaster-assistance/coronavirus-covid-19
o Apply directly through the SBA disaster website- https://covid19relief.sba.gov/#/
– Economic Injury Disaster Loan Advance (Also referred to as Economic Injury Disaster Grants (EIDG))
o Part of the EIDL process
o $10 billion in funding for an advance of $10,000 within three days to small businesses and nonprofits that apply for and SBA Economic Injury Disaster Loan (EIDL)
o THIS GRANT DOES NOT NEED TO BE PAID BACK even if the EIDL is denied.
o May be used to provide sick leave to employees, maintain payroll, meet increased production costs due to supply changing disruptions, or pay business obligations, including debts, rent and mortgage payments.
o Applied for as part of the EIDL process website- https://covid19relief.sba.gov/#/
– Paycheck Protection Program (PPP)
U.S. Treasury Secretary Steven T. Mnuchin and Administrator of the Small Business Administration (SBA) Jovita Carranza issued the following statement on Friday, April 24, 2020 on the resumption of the Payroll Protection Program (PPP): “The Small Business Administration will resume accepting PPP loan applications on Monday, April 27 at 10:30AM EDT from approved lenders on behalf of any eligible borrower. This will ensure that SBA has properly coded the system to account for changes made by the legislation.”
The Paycheck Protection Program is an SBA funded and approved loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
o No SBA fees
o 6 Month First Payment Deferral (with up to one year)
o Loan Term is Two Years
o Interest Rate will be 1.00%
ο General maximum loan size = the lesser of $10,000,000 or 2.5x the business’s average monthly payroll costs from the last twelve months plus the outstanding amount of an EIDL made between 1/31/20 and 4/3/2020 and less any advance amount under an EIDL COVID-19 loan.
o No collateral or personal guarantees required
o Am I Eligible? What counts as payroll costs? What can I use the funds towards? What about forgiveness?
ο How do I calculate my payroll costs?
How Do I APPLY?
You may be eligible for a loan under the Small Business Administration’s (SBA) new Paycheck Protection Program. The program is designed to provide small businesses access to capital for payroll and other overhead costs. Funds are limited and subject to availability from the SBA.
If you are a member of Awakon Federal Credit Union, fill out the below application and contact Katie Braun to establish a secure connection to submit your application and required documentation:
Call 989-733-8557 ext. 2501 or email firstname.lastname@example.org for more information.
To securely submit your application, visit the Info Center in online banking.
– Log in with your It’s Me 247 Online Banking credentials
– Select INFO CENTER
– Select PPP LOAN APPLICATION REQUIRED FILES
– Fill out your first, last, and business name
– Drag and drop your files and submit
If you are not a member of Awakon Federal Credit Union, please reach out to your primary financial institution for assistance in finding an SBA 7a lender.
For additional information, visit the below link:
– Small Business Debt Relief
o SBA will cover all loan payments on certain non-disaster 7(a), 504, and microloans for 6 months. This will include principal, interest, and fees for six months.
This will also be available for new borrowers who take out loans within six months of the President signing the bill into law.
This does not include a PPP loan
The SBA is directed to begin covering these payments within 30 days but we are waiting on the details of how this will be handled