Another round of funding offers hope for struggling self storage owners
By Laura Williams-Tracy, SSA Magazine
Self storage operators who missed out on the first round of funding intended to help small business survive the COVID-19 pandemic have another shot – but it will go fast.
Today, President Trump signed into law another $484 billion relief bill. This second round of funding includes $370 billion for low interest and forgivable loans through the wildly popular but so far elusive to all Paycheck Protection Program and emergency business loans.
The pandemic has brought a swift and devastating end to the longest economic expansion on record. Over five weeks, 26 million people have filed for jobless aid, or about one in every six workers.
Paycheck Protection Program
With the new funding, $310 billion will go toward the Paychcck Protection Program. The initial round of $350 billion in funding for the PP was exhausted in just 14 days. While many small businesses were left out of the first round of funding, banks still hold many unfulfilled applications. There are likely thousands of small business owners already in the queue, waiting for loans once funding is replenished.
Under the PPP, employers with fewer than 500 employees can apply to get a loan equivalent to two and a half times their average monthly payroll expenses, which includes healthcare and retirement expenses for employees. The loans are made at a low fixed rate. Borrowers will make no payments for six months and the total term is expected to be two years. The loans will be forgiven in the business restores its fulltime employment and salary levels by June 30.
After a rocky roll out of the first round of funding, banks and applicants will be ready this time. It is estimated that thousands of small business owners are in the queue to possibly receive a PPP loan. According to the National Federation of Independent Businesses, about 70% of small business owners tried to apply for the PPP loans and 50% filed for Economic Injury Disaster Loans. Of those, 20% received PPP loans and 10% receive EIDL funds.
The Small Business Administration is administering the Economic Injury Disaster Loan program. The program is intended to cover certain expenses that business owners cannot cover during the crisis with loans of up to $2 million, an interest rate of 3.75% and a term of up to 30 years.
If you haven’t already completed an application, check with your business banker to see if you can still apply. Many banks have application portals on their mobile banking sites.
Be ready with key documents. Those include your latest tax records, average monthly payroll expenses, company formation documents and payroll reports. A delay in getting documents likely means getting passed by for a loan.