UPDATE: SBA is currently offering PPP loans until May 31, 2021.
The SBA also has announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program, until 2022.
Most organizations offering in-person educational classes and workshops have been affected by the pandemic. While many organizations have increased their online opportunities and have worked hard to provide in-person experiences as local rules allow, it’s still been a hard year.
Fortunately, some organizations may find financial relief available as part of recent COVID relief legislation.
Many educational providers are considered small businesses, and we encourage such organizations to look into these programs. Additionally, eligibility for the PPP has been expanded to include 501(c)(6) organizations, so you may be eligible now even if you were not during the first round. At least $25 billion is being set aside for Second Draw PPP Loans to eligible borrowers with a maximum of 10 employees or for loans of $250,000 or less to eligible borrowers in low- or moderate-income neighborhoods.
While funds are not as scarce as in early rollouts of these programs, if you are eligible it is recommended that you apply as soon as possible.
What is Available?
In December of 2020, the United States Congress passed a long-anticipated additional round of COVID relief legislation. This relief program includes grant and loan programs administered by the U.S. Small Business Administration, including expansions of the Paycheck Protection Plan and other small business support.
Applications for many programs are currently open, including the Second Draw Paycheck Protection Program ($284.45 billion) and Economic Injury Disaster Loans ($13.5 billion). Grants for performing arts organizations and theatres will be available as part of the Shuttered Venue Operators Grant program ($15 billion). The SBA also has a program for debt relief for existing borrowers.
Additionally, expanded unemployment insurance options may be available for those out of work for reasons related to the pandemic. The U.S. Department of Labor has details on the Continued Assistance Act.
When Do the Relief Programs Begin?
- Eligible businesses, organizations, and individuals can apply for a Second Draw PPP Loan from January 13, 2021, until March 31, 2021.
- The Shuttered Venue Operators Grant program is expected to open in late January 2021.
- Applications for Economic Injury Disaster Loans are ongoing. Businesses may apply at any time.
How Do I Apply?
For many businesses, the process has gotten easier.
To be matched with an approved lender, visit the SBA Lender Match website.
A simplified application process has been created for loans $150,000 and below. Applicants must fill out a one-page online form and supply certifications.
How Can This Money Be Used?
These funds can be used to cover payroll and for certain other items, like payroll, rent, mortgage interest, and utilities. For details, please review the SBA documentation.
While these are loans, the SBA will forgive the PPP loan provided the money is used for items that qualify for forgiveness. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest upon providing supporting documents to verify the funds were spent appropriately.
The process isn’t difficult and we urge educational programs to apply for these relief funds.
We hope that this has been helpful to you and to your financial planning during these challenging times.
For more complete information on current relief programs, visit the SBA website to learn more.