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Small Business Development Centers Answer Your Questions About Getting Coronavirus Help
The Small Business Administration has several programs for companies in need of coronavirus-related aid. (Screenshot: Small Business Administration website)
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Small business owners impacted by coronavirus have told me they're having a tough time applying for the Paycheck Protection Program, the federal loan program designed to help them.
Fortunately, there are organizations that can help: Small Business Development Centers.
Most days at 3 p.m., the Orange County Inland Empire Network and the Los Angeles Network of the Small Business Development Center spend an hour answering questions from business owners about how to get a loan under the federal Paycheck Protection Program and other government assistance.
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On Tuesday, April 7, I listened in. Here's what I heard
(Note: Things are changing fast, so if you want the latest information on getting aid, considering signing up for one of the webinars):
Q: What is the difference between the Economic Injury Disaster Loan Program (EIDL) and the Paycheck Protection Program (PPP)?
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A: EIDL is a loan that covers six months of operational expenses and is administered by the Small Business Administration. Up to $10,000 may be forgivable.
PPP is a loan that covers two months of payroll and is administered by banks. If you use 75% of the loan on payroll, it is forgivable.
Q: I applied for an EIDL and haven't heard back. What's up?
A: If you applied before March 30, apply again so you can get the additional $10,000 forgivable loan. Otherwise, it can take 2 to 3 weeks to get your money.
Q: How can I find a list of banks that will lend me money under PPP?
A: Try your bank first. You can also find a lender here.
Q: Wells Fargo isn't accepting new PPP applications. Is there a list of banks that will work with non-customers?
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A: There's no official list. But Fortune Magazine made one.
Q: I'm an independent contractor/sole-proprietor. Can I apply for PPP?
A: Yes, beginning April 10. You can also apply for unemployment, although California may not be processing unemployment applications for independent contractors yet.
Q: When I calculate payroll for EIDL or PPP, can I include independent contractors?
A: No. You only include employees on your payroll.
Q: Will the PPP still be forgiven if I need to hire new employees?
A: Yes. As long as you spend 75% of your PPP loan on payroll it will be forgiven.
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Q: I already laid off some people. Do I have to rehire all of them under the PPP?
A: No. You don't have to re-hire the same number of employees, or even the same people. You just have to use 75% of your PPP loan on payroll for it to be forgiven.
Q: How do you prove that you used your PPP loan for payroll?
A: We don't know. But there may be an audit down the line.
Q: I have cash employees. Can I count them on my payroll when I apply for PPP?
A: Only if they are reporting their income to the IRS.
Q: Do owner's draws count towards payroll under the PPP?
A: It's unclear. There have been mixed messages from SBA.
Q: I just started my business in 2020. Can I apply for PPP?
A: Yes!
Q: I'm not a citizen or a permanent resident. Can I apply for PPP?
A: Yes, as long as you have an ITIN. (Note: KPCC/LAist spoke with one lender who is advising undocumented business-owners not to apply for PPP because of questions five and six on the application form, which ask about criminal history.)
Q: Has anyone gotten their PPP loans yet?
A: As of Tuesday, April 8, the SBDC representatives on the call said they were not aware of anyone receiving money yet.
Q: How can I listen to one of these webinars in the future?
A: Sign up here.
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Your support for independent local news is critical. With federal funding for public media gone, LAist faces a $1.7 million yearly shortfall. Speaking frankly, how much reader support we receive now will determine the strength of this reliable source of local information now and for years to come.
This work is only possible with community support. Every investigation, service guide, and story is made possible by people like you who believe that local news is a public good and that everyone deserves access to trustworthy local information.
That’s why we’re asking you to stand up for independent reporting that will not be silenced. With more individuals like you supporting this public service, we can continue to provide essential coverage for Southern Californians that you can’t find anywhere else. Become a monthly member today to help sustain this mission. It just takes 1 minute to donate below.
Thank you for understanding how essential it is to have an informed community and standing up for free press.
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