By Phil Neumann, Mainstem Malt
Disclaimer: The following content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
I hope you all are staying healthy, safe, and sane during these unprecedented times for small businesses. Responding to this kind of disruption takes a whole lot of everything we have, and sometimes what we don’t. I’m posting today to point out several emerging disaster funding opportunities available to many folks in the craft malt community.
To be clear, I’m not a finance or accounting expert and am still uncertain how new funding opportunities will materialize in the coming weeks. However, from the looks of the new stimulus package approved on Friday, March 27, quite a bit of help is on the way in various forms.
As part of the stimulus, two federal loan programs have emerged to help small businesses cope, both administered by the Small Business Administration’s (SBA). One program is the Economic Injury Disaster Loan program (EIDL) and the other is the Paycheck Protection Program (PPP). The EIDL loans are backed by $50 billion from when the national emergency was declared and are currently open for applications directly through the SBA. The PPP loans are backed by $350 billion from the CARES Act, the SBA has given guidelines on how SBA-partnering banks should conduct the application process, and those loan applications should be available to borrowers in the coming weeks. Through both programs, there will be some solid incentives to keep up team morale and productivity on the move to greener pastures.
Which program will be right for individual small businesses will vary case by case and it’s important to note that a single small business cannot combine loans from both programs. I’ve found this comparison table to be helpful in outlining the current details of each program.
So if you’re a small business that’s sustaining “substantial economic injury” from the pandemic and are considering the need for additional financing to get through the coming months, I would consider applying for an EIDL loan sooner than later. The funding process takes up to 1 month and applicants can delay their final decision to accept a loan while working with their trusted banker on a potential PPP loan. Better to have options at that point. Also keep in mind that as an added feature of the new CARES Act, submitting The EIDL application now comes with up to $10,000 in cash for the company applying, within 3 days of applying, as an advance to the potential loan.
For up to date information on the SBA’s EIDL loans and to apply, visit https://www.sba.gov/disaster-assistance/coronavirus-covid-19/.
Looking forward, I also recommend that folks keep an eye on spending within several other CARES Act budget items. For example, $50 billion has been allotted for the US Department of Agriculture’s response and $150 billion has been allotted for State, Local, and Tribal governmental response. I have a feeling some interesting public funding opportunities will emerge at federal, state, and local levels in the coming months, both for immediate disaster response assistance and to kickstart longer-term economic development projects. Both could be very helpful dynamics for a growing craft malt ecosystem.
Want to stay abreast of current info on disaster relief funding opportunities and other things pandemic? Guild Director Jesse Bussard has compiled a great collection of resources on the Guild’s Coronavirus Resource Center page covering a wide range of topics from the beverage community response to small business disaster funding.