Federal and state governments have announced relief programs to help the nation’s 30 million small businesses suffering financial hardships in the wake of the novel coronavirus (COVID-19) pandemic.
The Economic Injury Disaster Loan program, managed by the Small Business Administration (SBA) in tandem with U.S. state and local government, will offer up to $2 million in low-interest disaster-recovery loans to qualifying small businesses and private, non-profit organizations. Loan recipients may use allocated funds as working capital to cover fixed debts, payroll, accounts payable and other bills required to maintain liquidity and continue operations. The SBA will release specific information about disaster-loan application requirements to affected communities after a U.S. state or territory makes a designated disaster declaration.
The interest rate for SBA loans made to small businesses without credit available elsewhere is 3.75 percent; businesses with credit available to them from other sources are not eligible. The interest rate for loans made to non-profits is 2.75 percent. While the SBA determines loan terms on a case-by-case basis, depending on each borrower’s unique circumstances, most loans offer long-term repayment plans of up to 30 years, which make repayments more affordable for borrowers.
Beginning today, Florida small businesses with between two and 100 employees can apply for a short-term, no-interest loan of up to $50,000 to bridge the financial gap until they can secure other sources of working capital, including payment of insurance claims or longer-term Small Business Administration (SBA) loans.
The Florida Small Business Emergency Bridge Loan Program is intended to help privately held companies in the state maintain operations through the COVID-19 pandemic. These one-year, interest-free loans of up to $50,000 per applicant require repayment. Any unpaid balance after the one-year period will incur interest at a rate of 12 percent. This is the 27th time the state activated the Florida Small Business Emergency Bridge Loan Program since it was first introduced in 1992 following Hurricane Andrew. For further questions, contact the Florida Small Business Development Center Network at 866-737-7232 or email Disaster@FloridaSBDC.org.
If you have questions or concerns about how you can manage your business, your estate or your personal wealth through the COVID-19 pandemic, please reach out to the fiduciary professionals with Provenance Wealth Advisors.
About the author: Todd A. Moll, CFP®, CFA, is a director and chief investment officer with Provenance Wealth Advisor, an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. He can be reached at the firm’s Ft. Lauderdale, Fla., office at (954) 712-8888 or via email at firstname.lastname@example.org.
Provenance Wealth Advisors, 515 E. Las Olas Blvd., Ft. Lauderdale, FL 33301 (954) 712-8888.
Todd A. Moll is a registered representative of and offers securities through Raymond James Financial Services, Inc., Members FINRA/SIPC.
Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors + CPAs. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Every investor’s situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment or withdrawal decision. Investing involves risk and you may incur a profit or loss regardless of strategy selected.