SBA outlines options for small businesses during pandemic



The federal government has rolled out a number of measures to provide assistance to small businesses impacted by the COVID-19 pandemic, and the best place to start when looking for information is the Small Business Administration (SBA).

Mina Ramon, with the SBA San Antonio District Office said it is both simple and complicated to navigate everything out there today.

“As far as what the SBA is providing we do have four primary ways we are assisting with small businesses,” she said.

Those include the Economic Injury Disaster Loan Emergency Advance, SBA Express Bridge Loans, SBA Debt Relief and from the recently past CARES Act, the Paycheck Protection Program.

“With the disaster loans we also offer the SBA Express Bridge Loan because it does take some time to get these disaster loans, so this kind of bridges that gap,” said Ramon.

Some of the programs can turn into grants if businesses meet certain requirements on how funds are used, and others offer deferments on payments.

“We also have our debt relief program, so any SBA disaster loan or any of the current ones you would receive, we would defer the payment automatically for a year,” Ramon said. “Then on several of our other loan programs we do have a six-month deferment on those payments as well.”

But before business owners jump to apply for loans or new programs, Ramon says there is an opportunity to have important conversations about their business.

“Our service that we recommend all businesses go through year round, whether there’s a crisis or not, is one of our resource partners,” she said. “Visit with one of our resource partners like the Texas State Small Business Development Center because they can help the small business work through a lot of the problems they are having.”

There may be changes that can be made that might mean not having to take out a loan.

“Sometimes businesses don’t realize they can cut some of their expenses in some places,” Ramon said. “It helps in reevaluating how they are doing things so we definitely recommend all businesses visit with our mentors because they do provide that sounding board for small business owners and they are free to use.”

But finding the right answer is not something that can be done universally, rather it varies dramatically from one business situation to another.

“It really is on a case by case basis and that’s one of the reasons we tell people to reach out to our business mentors or business advisors because they can have these confidential conversations with the business owner,” Ramon said. “A lot of businesses don’t quite understand how their finances work and some of the other options that could be available to them. A business mentor or advisor will say ‘Why don’t you try this, or have you thought about that?’”

These advisors are able to often take a fresh look from a different perspective.

“It is good to have that sounding board and having someone not directly involved with you in the business that can help you make some of these decisions,” Ramon said. “A lot of times business owners run through with their blinders on because they’re so focused on what’s going on directly in their business that they don’t see some of the other options that are available.”

Regular online informational opportunities are also available to any small business owner looking for information or assistance.

“Right now our district office is doing several webinars throughout the week that provide all the resources that the SBA is providing to the small business community,” Ramon said. “Each of the webinars we’re offering right now with the COVID-19 small business resource webinars is the same exact information at each of the sessions, but whenever we do have updated information I go through and update that presentation with the most recent information available to us.”

When it’s all done, there is always an opportunity to ask questions.

“We go through our Powerpoint presentation, then we open it up for questions and that’s probably the most beneficial part to our webinars is that it offers a one-on-one experience,” Ramon said. “We do it through Skype so we have our chat box and one of our team members goes through and answers questions through the chat box and then at the end of the presentation we open up the phone line so that people can ask their questions.”

If a loan turns out to be the right option, the SBA understands that the process can be cumbersome and delayed, but there is an answer for that as well.

“The SBA does see that is a problem that small businesses may run into and that’s one of the reasons why as part of the CARES Act they implemented on the Economic Disaster Loan the loan advance,” Ramon said. “Through the loan application website, small businesses are able to opt in to this loan advance that will give them up to $10,000 in advance for their small business, and this advance does not need to be paid back. Essentially it would be a grant.

“It is the same thing with the Paycheck Protection Program,” she said. “We work with local lenders on this program and small businesses that utilize these funds, if 75 percent of the funds go to payroll, then these loans could be forgiven, again s long as it goes 75 percent to payroll.”

There have been issues with larger banks being able to process the Payroll Protection Program applications early on, but Ramon said there is another option.

“A lot of our local community lenders have that capability,” she said. “A lot of people don’t think about community lenders and they’re a great asset to the community.”

The COVID-19 pandemic has had a huge impact on businesses, said Ramon, adding the situation has been “very fluid” from the beginning.

“We’ve never seen an event like this,” she said. “Most of the time when we think of disaster, we think of a localized disaster like a hurricane. Even a large-scale hurricane like Harvey, that ripped through multiple states, was a large number of small businesses affected and we did our best to support them. With this crisis it is such a large scale compared to what we normally see. This is the entire nation’s economy and all the small businesses effected by this and they’re all trying to get assistance through our system.”

Applications have been reduced dramatically in length to help speed the process in hopes of accommodating more businesses and cut wait times.

“We’ve really decreased the requirements for small businesses to receive these loans because we’re trying to get the money into the hands of the owners,” she said. “Small businesses are the backbone of the economy, especially in smaller communities. They are feeling the impact of these businesses that are out because of the COVID-19 social distancing and everyone having to stay at home.”

Lastly, Ramon urges business owners be patient.

“It’s not what a lot of people want to hear, but be patient, all things will work out.”

The SBA website has detailed information on loan options and the application process, but below are some basic details of each of the primary programs available.
• Paycheck Protection Loan
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
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.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. You should consult with your local lender as to whether it is participating in the program.
Lenders began processing loan applications April 3. The Paycheck Protection Program will be available through June 30.
• Economic Injury Disaster Loan
The SBA’s Economic Injury Disaster Loan provides economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. 
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.
The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.
• Express Bridge Loan Pilot Program 
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
These loans can provide economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loan or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
• SBA Debt Relief
The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27.