SOUTH JORDAN Utah, (ABC4 News) – The pandemic has brought economic devastation to Americans and business owners alike. In an effort to help those struggling, Congress has agreed to move forward with its second stimulus package. A local business owner said this additional financial aid would help significantly.
Elegant Threading is one of millions of America’s small businesses that’s struggled to keep their doors open during the COVID-19 pandemic.
“We are like 60 percent down,” said Sabina Pandy, Elegant Threading co-owner.
COVID-19 restrictions shut down Pandy’s business for three months. And while now open, she said times are tough, as she still owes her three month’s rent and does not have as much customer demand.
“After we reopened, we are not making money as much as we were before,” she said.
Scraping by, she said she barely makes enough to pay rent and all three employees. And because of the pandemic’s financial strain on her business, she does not get to spend much time at home.
“The struggle is I have to work seven days a week,” Pandy said. “I’m here nine to 10 hours and I don’t have time with my kids to spend with them. This is the most difficult for me.”
When the first stimulus package was approved by the federal government, Pandy said she applied for financial relief, but was not approved.
With additional funding coming soon to help some small businesses, Pandy is hopeful she will receive financial aid.
“I can give a paycheck to my employee and pay my rent,” she said.
‘Real people, real livelihoods’ at stake
Holland and Hart commercial finance partner Tim Crisp said once congress approves its second stimulus package, primarily small businesses will be able to apply for financial relief at their bank. He said funding is on a first-come-first-serve basis.
“If you’re a small business owner, you should be looking at this and talking with your banker or your financial advisor about if your eligible to apply for it. Because there’s a limited appropriation here,” he said.
He said this stimulus package will provide more than $284 billion to American businesses and will revive the Paycheck Protection Program (PPP) that ended over the summer.
“We’re talking about real people, real livelihoods and families and whether people are going to lose their live savings or bring home a paycheck,” Crisp said. “The good lord knows we all need some good news these days and we need some assurance that the businesses that we own and businesses down the street will be open when this all ends.”
Monday, Tim Crisp shared what small businesses owners should know about the relief funding.
Q: What do we know about the amount of money small or medium-sized businesses may be eligible to receive?
A: “This is a forgivable loan program for small businesses. There are also $20 billion in idle grants, economic injury, disaster loan grants administered through the SBA and will be directed at the hard-hit minority communities.”
Q: When can small business owners apply?
A: “The text of the law will be introduced in Congress and it’s expected to quickly pass…once it’s passed, the good news is the PPP program is already in existence…so the SBA should be able to get banks to start accepting applications and reopening those application portals fairly quickly.”
Q: Is the stimulus money to businesses only under the PPP or are there other ways to receive support?
A: “For the most part, the main business relief program is going to be through the small business protection program.”
Q: How is the money divided?
A: “[Money] is not allocated by state. It’s really allocated on an applied and approved basis.”
Q: Is there anything new/different about which businesses will be eligible for new PPP funds versus the last stimulus payments?
A: “We don’t know in part because the details and the text of the law has not been released. And the Treasury and Small Business Administration enact rules to implement that.”
Q: Many businesses are still going through or haven’t even started the process of getting their previous loans forgiven. Will this impact their ability to receive this additional funding?
A: “From what we know, it should not. Even if they are still within their period measured for the use of their funds, even if they’ve not applied for forgiveness yet (and they’re not required to yet), they still should be able to apply for a second PPP loan with the structure that’s been announced.”
Q: What advice would you give businesses as they determine whether this funding is right for them?
A: “First make sure, ‘Am I an eligible business?’ There are some types of businesses that are not eligible. They are really only able to do this for businesses with employees. And you have to meet the small business size requirement.”
Q: Are there any penalties?
“There are penalties for taking out a loan if you don’t meet the requirements. And so, it’s really important that the business talk with their banker or talk to a financial advisor that understands the SBA requirements.”
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