PPP Extended, SBA Debt Relief, and More Free Money! Do You Dare Expand During Covid!?!
So, a few good things have happened. For those who needed a little more time, the SBA extended the 8-week period to 24 weeks for spending the PPP funds. The 75/25 rule was also amended to 60/40 (payroll costs/operating costs). Now those who were not able to meet the June 30th deadline to apply for PPP have also gotten a little help and have until August 8th now. All great things!
Now, if you are still doing great even with the Covid-19 craziness, CONGRATULATIONS!! Hopefully, this means you even have the ability to grow. If that is the case, the stimulus package signed by the president back in March, also had a program to help with business acquisition!
The SBA Debt Relief program was definitely overshadowed by the PPP program with great reason. Covid-19 had created a smokescreen in which we didn’t know which way would be up at the end of this and businesses were being shut down by mandates due to the same. The state in which we find ourselves while not totally clear, some are definitely able to say they were able to roll with the punches a bit better than others.
For those who were able to fare better, this may be a time to look at expanding and picking up businesses which might be selling at discounts. To do this, look towards the SBA Debt Relief program. Here’s are some highlights of the benefits:
- For loans not on deferment, SBA will begin making payments with the next payment due on the loan and will make six monthly payments.
- For loans currently on deferment, SBA will begin making payments with the next payment due after the deferment period has ended, and will make six monthly payments.
- For loans made after March 27, 2020 and fully disbursed prior to September 27, 2020, SBA will begin making payments with the first payment due on the loan and will make six monthly payments.
This program will help you not only with new loans but also current 7(a) loans, 504 loans, and Microloans through the SBA.
Obviously, this is not COMPLETELY free, but if you currently have any of these types of loans with the SBA, you should definitely contact your lender and see if you can get the 6 months of debt relief. If you are looking to purchase another business and apply for a new loan, the funds must be disbursed by September 27th, 2020. Some lenders are better than others with SBA loans so make sure you call around. Most importantly do your due diligence when thinking about acquiring any business, especially when acquiring new debt.
Remember this program will ONLY pay for 6 months of payments, but if you were already thinking about it or in the market for an acquisition, take the money and RUN!!