April 20, 2020—Amid reports of stalled payments and depleted funding from the Paycheck Protection Program and Economic Injury Disaster Loans, one expert says that shop owners should still keep their eye on the ball.
Stuart Sorkin, founder of business consulting firm The Business and Legal Advisors, told 10 Missions Media that he expects more money to be approved for PPP. But make sure that any new wave of funding covers the necessary payroll periods.
"I think that shops should be prepared to send in a new application, once Congress appropriates additional funding for PPP Loans," he says. "However, depending on the amount of time that it takes to get additional funding, any additional funding may come with some differences regarding the dates for calculating payroll costs."
He also suggested that shops look into the Main Street Lending Program, a Federal Reserve utility that has been bolstered in response to coronavirus. Banks will make loans to eligible small and medium-sized businesses and the Fed will then purchase 95 percent of the loan via a special-purpose vehicle, reported Reuters.
"The new Main Street loan program allows for loans up to $25 million for a four-year term and an adjustable interest rate, which will range from 2.6 percent to 4.6 percent," Sorkin says.
The Main Street Lending Program is still available and shop owners can apply for them in addition to the PPP. One note to be aware of it that you cannot claim to utilize the proceeds of a PPP loan for the same purposes as you will claim to utilize Main Street, according to a powerpoint shared by Sorkin.
Main Street is available through Federal Reserve loans through banks and is a minimum loan of $1 million. Here's more information, courtesy of Sorkin, and how it compares to the Economic Injury Disaster Loan Assistance.
Congressional leaders are promising swift action to replenish some relief funding.
