COVID-19 Available Business Loans and Grants – Welcome to the City of Fort Worth
The US Small Business Association (SBA) can assist small businesses with accessing federal resources and navigating their own preparedness plans, as described in the CDC’s guidelines for business and employers.
The SBA works with a number of local partners to advise, support and train small businesses. The SBA has 68 district offices as well as support from its resource partners such as SCORE offices, women’s business centers, small business development centers, and Veterans Business Outreach Centers. Resource partners such as SCORE and the Tarrant Small Business Development Center are available at the Fort Worth Business Assistance Center at 1150 S. Freeway, Fort Worth, TX 76104.
Paycheck Protection Program (PPP)
On March 27, Congress approved the CARES Act, a federal act to provide economic relief to individuals and businesses in the face of the COVID-19 pandemic.
This is an integral part of the CARES Act Paycheck Protection ProgramThis provides small business owners with tenable loans that can be used for labor costs (including social benefits), mortgage interest, rent, and utilities. When used for these purposes, the funds can be allocated in full.
Loan payments are deferred for six months after the Small Business Administration has made a forgiveness decision and no collateral or personal guarantees are required. If the loan is not granted, borrowers have up to five years to repay the loan with 1% interest. There are no government or lender fees for small businesses. To apply for the PPP loan to be forgiven, the borrower must: a Forgiveness application and send it to your lender. Many lenders also have an electronic application available that they can fill out directly.
The federal government approved a second round of funding after exhausting the first round, which was published on April 27, 2020. Funding is currently still available and small businesses are encouraged to apply.
Important points to keep in mind:
- Lending depends on companies using funds for the required categories. At least 60% of the loan amount must be used on payroll to restore or maintain the workforce for the loan to be issued. Otherwise the loan will not be granted. The remaining 40% can be used for mortgage interest, rent or ancillary costs with full forgiveness retained.
- There are two exceptions that allow complete forgiveness even if the company does not fully restore its workforce. Borrowers may face their staffing needs due to the inability to hire an employee, hire a similarly skilled employee, or unable to restore operations to the same level of activity due to COVID-19 restrictions.
- All small businesses are eligible. This means a company with 500 employees or less and includes nonprofits, veteran organizations, tribal companies, the self-employed, sole proprietorships, and independent contractors.
- All loans have the same terms regardless of the lender or borrower.
- Businesses can apply for both the Small Business Paycheck Protection Program and a Catastrophe Damage Loan, but they cannot double-spend.
- Borrowers now have 24 weeks (previously eight weeks) to spend the funds received and bring their workforce back to pre-COVID-19 levels. However, PPP funds cannot be spent beyond December 31, 2020 (the previous deadline was June 30). Companies can still ask for forgiveness after eight weeks if they prefer.
- The deadline for corporate loan repayment has been extended from two to five years.
- Businesses can delay paying wage taxes even after taking out a PPP loan. Dates and deadlines can be found on the IRS website.
For the latest information and FAQs for lenders and borrowers, visit the SBA website or speak to your lender.
The Nav CARES Act SBA Loan Calculator enables businesses to find out how well they qualify and find their way around the legislation.
View a PDF guide on the Paycheck Protection Program.
Visit the Paycheck Protection Program website or contact your financial institution for the most up-to-date information.
Find a nearby lender who is authorized to make a loan under the paycheck protection program
Entrepreneurs can download the application online, fill it in and forward it to an existing SBA 7 (a) loan partner, a federally insured bank or a federally insured credit union for official submission. (These institutions may allow submission via email on their website.) Business owners may be asked to provide their tax and salary information, as well as information about their rental and utility costs.
Prepare the following for your banker to speed up the process:
- Date the business started.
- Company postal address.
- When filed, the company’s 2019 Federal Tax Return. If not already submitted, complete financial data for 2019 should be prepared, including profit and loss and the company’s balance sheet.
- IRS Form 941 – Employer’s quarterly income tax return for all four quarters of 2019.
- The number of employees paid more than $ 100,000 a year.
- Calculates the total amount of wages for employees paid during the applicable Base Period, including amounts paid for a pro rata annual salary of $ 100,000.
- When filing with a new bank, other documents may be required:
- Entity documents
- Certificate of good standing
- Borrower’s Copy – an IRS letter detailing your employer identification number, state-filed deed of incorporation, articles of association and statutes (or operating agreement, if LLC), partnership agreement, and, if applicable, adopted name certificate filed with the state.
SBA Economic Injury Disaster Loans (EIDL)
The SBA provided targeted low-interest disaster recovery loans and advances of up to $ 10,000 to small businesses hit by the COVID-19 situation. Currently, only agricultural businesses can apply due to the limited funds available and are capped at $ 150,000.
According to SBA partners, companies that have already submitted an application but haven’t received funding will likely be in first place for the next round of funding if they don’t withdraw their application. In addition, companies are encouraged to prepare all documents with their financial institution so that they can be submitted immediately after the publication of the next financing round.
Visit the Catastrophe Credit For Economic Injury Loans website for the most up-to-date information.
Other SBA loans
The US Small Business Association offers a number of small business credit resources that they can use to run their business. For more information about loans or how to contact a lender, visit the SBA website.
SBA loan partner
The US Small Business Association (SBA) has developed Lender Match, a free online money transfer tool that connects small businesses with participating SBA-approved lenders within 48 hours. Many of these programs can also be accessed at the Fort Worth Business Assistance Center.
- 7 (a) program offers loan amounts up to US $ 5,000,000 and is an all-inclusive loan program provided by loan partners to eligible small businesses in the state and territories. Use of the proceeds includes: working capital; Expansion / renovation; New building; Purchase of land or buildings; Purchase of equipment, furnishings; Leasing improvements; Refinancing debt on imperative reasons; seasonal credit line; Inventory; or start a business.
- Express loan program offers loans up to $ 350,000 for no more than 7 years with the option to rotate. There is a processing time of 36 hours for approval or rejection of a completed application. The use of the proceeds is the same as that of the 7 (a) Standard Loan.
- Community Advantage Loan Pilot Program enables mission-based lenders to serve small businesses in underserved markets with a maximum loan size of $ 250,000. The use of the proceeds is the same as that of the 7 (a) Standard Loan.
- 504 loan program is intended to promote economic development and the creation and / or retention of jobs. The eligible use of the proceeds is limited to the acquisition or the eligible refinancing of the fixed assets.
- Microcredit program includes granting credit to underserved markets through not-for-profit credit institutions. Authorized use of loan proceeds includes working capital, supplies, machinery and equipment, and furnishings (excluding real estate). The maximum loan amount is $ 50,000 with an average loan size of $ 14,000.