small business owner

Understand all the options that are on the table as you respond to COVID-19’s business impacts.

Understanding Your Financing Options

Has your small business been impacted by COVID-19? Are you working to sort through your next steps and wondering what options are on the table?

Our experts sat down with local lenders, staff from the U.S. Small Business Administration and others to share more about the programs currently available. Find our recap below along with the full webinar recording and slide deck.

We are here to support you – the small business owner – during this time. 

We’re offering meetings every day to talk with current small business owners about their financing options and provide assistance with the disaster loan application process. You can schedule a virtual meeting with a business consultant at a time that works best for you. As always, the cost for our consulting is covered by our funding partners.

U.S. Small Business Administration

Economic Injury Disaster Loans

The U.S. Small Business Administration has an Economic Injury Disaster loan program that is available to businesses that have been negatively impacted by COVID-19.

These disaster loans can be used to pay fixed debts, payroll, accounts payable, and other bills required to operate business, including an owner’s salary and leasing costs.

No collateral is needed for loans up to $25,000. If a business seeks a loan for more than $25,000 business assets will be required for collateral, but personal assets will not be required of the owner.

The SBA will determine how much money each business is eligible for, primarily based on business liabilities. Tax information will be pulled directly from the Department of the Treasury and you must be current on your tax obligations. If the initial disbursement is not enough, a business owner can request a loan modification without having to complete the entire application process again.

The SBA Economic Injury Disaster loan application can be daunting. Find our full guide to the program and FAQ online.

Traditional SBA Loans

The SBA’s traditional 7A loan program is still in place. This program may yield quicker turnarounds than the Economic Injury Disaster loan program for businesses that qualify.

SBA lenders in your community can discuss these traditional SBA loans and conventional business loans to evaluate what might be the best fit for your business.

Your Business Lender

Many businesses have existing loans and a relationship with a business lender. If you have any kind of existing loan, the first thing you should do is get in touch with your lender to share how your business is being impacted.

Loan deferment is a normal procedure, given the circumstances. Your lender may be able to offer anything from a 90-day to six-month deferral on your current loan payments, allowing you to only pay interest on the loan.  Others may be able to lower the interest rate for a short period of time.  Each request is handled on a case-by-case basis.

Deferment applications will likely require a 2019 Profit and Loss Statement and a 2019 tax return, when it is available. Lenders are working to move quickly but still must adhere to regulatory guidelines. Current and accurate financials will streamline the process of determining how COVID-19 has affected your business.

Microloans

Microloans may be a good financing option for your business during this time. When we spoke to experts in this space, we learned capital is available to small businesses and microlenders are still lending during the COVID-19 pandemic.

Justine PETERSEN microloans are small loans that are typically less than $10,000. Almost all of their lending activity is less than $50,000. These loans typically have a three-week turnaround time from application to funding.

When applying for a microloan you would need to provide the previous two years of tax information, three months of bank statements (personal and business), mortgage statements, and all business incorporation paperwork.

Another microlender with a presence in Missouri is the FORGE Fund. FORGE lends money to individuals, small businesses and farms in Arkansas, Oklahoma and Missouri. Similar to other loan programs, applications are submitted and reviewed. The size of your loan request determines the level of underwriting that will take place.

If you currently have a microloan, you may be able to defer payment. Again, communicating directly with your lender is important to understand all options available to you.

Here to Help You

We are here to support you – the small business owner – during this time. 

We’re offering meetings every day to talk with current small business owners about their financing options and provide assistance with the disaster loan application process. You can schedule a virtual meeting with a business consultant at a time that works best for you. As always, the cost for our consulting is covered by our funding partners.

The Missouri Small Business Development Center (SBDC) at Missouri State University serves as part of the efactory’s business support programs in Springfield, MO. The Missouri SBDC at Missouri State University serves 16 counties throughout Southwest Missouri with offices in Springfield, West Plains and Forsyth.  To find a MO SBDC in your area visit our statewide website.