On Thursday, April, 2, 2020, the City of Burien shared the following economic assistance opportunity to Burien businesses and nonprofits during the COVID-19 crisis – definitely worth a read if you’re a local business owner:
Dear Burien business owner,
As the COVID-19 outbreak continues to impact the business community, the City of Burien wants to make you aware of two time-sensitive economic assistance opportunities to help businesses during this difficult time. The federal CARES Act stimulus bill includes a ‘Paycheck Protection Program’ designed to offset financial hardship for businesses due to COVID-19. The program allows for loan forgiveness, which in essence turns much of the loan into a grant. We encourage you to apply quickly as funds are limited and will go fast.
The CARES Act also added a $10,000 emergency loan advance to the existing Small Business Administration (SBA) Economic Injury Disaster Relief loan program to provide immediate relief for small businesses. Funds will be made available within 3 days of a successful application and this $10,000 loan advance will not have to be repaid, even if the loan application is not approved.
Businesses may apply for both loan programs, but proceeds from each may not be used for the same need. Please consult your lender regarding these restrictions.
The U.S. Chamber of Commerce put together a brochure with more information.
What is the SBA 7(a) Paycheck Protection Program?
Under the CARES Act stimulus bill, nonprofits and small businesses with fewer than 500 employees will be eligible for loans to meet payroll and other qualifying costs, including rent, utilities, and interest on mortgages. Much of the loan can be forgiven if you keep staff on payroll during the loan period (currently March 1 through June 30), or quickly rehire employees and maintain salary levels. This, in essence, turns much of the loan into a grant. Funding is limited and will be given out on a first-come, first-served basis. Recipients do not have to certify that they are unable to obtain credit elsewhere.
- Loan amount is 2.5 times the organization’s average monthly payroll costs.
- Funds can be used for qualified expenses including: payroll costs, interest on mortgages, rent, and utilities over the 8-week period after the loan is made.
- The loan may be forgiven if the employer maintains or quickly rehires employees and maintains salary levels through June 30. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- The self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply.
- No collateral or personal guarantees are required.
- Loan payments will be deferred for six months.
- Consult with your local lender as to whether it is participating in the program. Develop a relationship with a qualifying local lender ASAP, especially if you don’t yet have one, since loans are made directly through participating financial institutions. View a list of qualified lenders. Check with your local branch of any of these qualified lenders for further information.
- Apply as soon as possible. The application process is not yet open, but lenders may begin processing loan applications as soon as April 3. We encourage you to check back often with your lender and the SBA website.
- Prepare your financial documents, including payroll documentation, for application. A sample application form has been provided by the SBA to help understand what may be required at application.
SBA Economic Injury Disaster Relief Program
The CARES Act also added a $10,000 emergency loan advance to the existing Small Business Administration (SBA) Economic Injury Disaster Relief loan program to provide immediate relief for small businesses. Funds will be made available within 3 days of a successful application and this loan advance will not have to be repaid, even if the loan application is not approved. Loans will be made directly by the SBA.
CARES Act Small Business Assistance Webinar
The City of Burien is participating in the Southside Mitigation and Recovery Taskforce (SMART) in response to the economic impacts of COVID-19. For more information on the ‘Paycheck Protection Program’ or other small business support available through the CARES Act, please register for the SMART webinar on Tuesday, April 7.
Feel free to forward this email to any interested parties who may be interested in this program.
Follow the City of Burien’s Economic Development team at facebook.com/BurienEconDev for additional information and to connect with residents and the Burien business community.
This is a quickly evolving situation and the King County website is the best source of current information on new Public Health orders and recommendations.
If you have any questions about resources, or if we can be of assistance in any way, please reach out to us at [email protected].