At the end of the year, many funding programs that have helped small businesses weather the coronavirus pandemic are doing the same.
The deadline for a U.S. Small Business Administration (SBA) COVID-era program is only a few weeks away, and they are advising business owners to submit their applications online and ask questions beforehand. the 31st of December.
The SBA’s COVID-19 Economic Disaster Loan (EIDL) program provides working capital to help businesses cover operating expenses and bounce back from the pandemic.
Applications for this federal aid program will be accepted until Dec.31 and will continue to be processed after that date until funds run out, according to the SBA.
The EIDL program provides low interest fixed rate loans directly from the SBA that must be repaid. Businesses can also apply for the EIDL Targeted Advance or the Additional Targeted Program Advance, which is SBA money that does not need to be repaid.
Keep in mind, whether you are aiming for a first EIDL loan, an increase in an existing EIDL loan, or a targeted advance, business owners must first and foremost apply for and be approved for an EIDL loan under of the process.
Nationally, the SBA has approved about 3.85 million loans from the EIDL program for a total of about $ 308 billion to December 8. In California, the SBA has approved 583,620 EIDL loans with a total value of approximately $ 55 billion, which is the highest total amount distributed to a state.
If business owners need help completing online application or if you have concerns about language or technology barriers, the San Diego and Imperial Valley Small Business Development Center (SBDC) offers free assistance.
Recently the SBDC hosted a webinar who discussed the EIDL loan program with a panel of six community lenders and what small business owners need to know about connecting to capital in the New Year. Here are three takeaways from local community lenders on how small businesses can prepare for 2022:
Have a plan to take care of your grants and loans
Lenders say it’s best not only to have your finances in order when you go to a financial institution, but you should also be prepared to explain how the pandemic may have impacted your finances.
“When you come to talk to a banker, myself or a lender, prepare your income, your tax documents and know what they mean,” said Roxanne Rostamian, branch manager at Banner Bank in Escondido. “So if you have suffered any losses and it was related to COVID, be able to explain that and how things are going to be different in the future.”
Find out how to keep capital available to be ready to seize opportunities
In addition to making sure your finances are sorted out before the new year, lenders say it’s best to keep cash on hand so you’re ready to grab the opportunity. Fernando Ponce, regional business development manager at Primary Funding Corporation, said he noticed that companies that were ready to reach out and access capital early in the pandemic had the capacity to thrive.
“Having the ability to raise capital is going to be very important,” he said. “You have to prepare and be ready so that if there is an opportunity you can grab it … It can be in a month, it can be in a year, but when that opportunity presents itself you want to be ready. to jump on it. and not to scramble to try to prepare everything and put everything in place to enjoy it.
Discuss taxes with your CPA, especially if you plan to apply for a loan in 2022
A common thread among business owners was to plan ahead for their finances and goals for the New Year.
“It’s a really big time right now because a lot of people are going to be doing their taxes and the way you file your taxes as a business owner will or will not provide cash for a loan. I’m not a CPA, so my advice is to talk to your CPA, ”said Miriam Torres Baltys, loan officer at CDC Small Business Finance.