We have already mentioned that the SBA has adjusted certain qualification standards for PPP loans, including the relaxation of membership rules for certain types of companies. Use our CARES Act SBA loan calculator to see how much money your business can receive. I am a co-owner of an LLC applying for a PPP loan (using the company`s current account) I personally wish to apply with the company`s current account as an independent contractor (status 1099) Will using the same account be a problem for two different companies or DBAs? Many SBA loans can mean that lenders feel like they`re taking more risk by working with you. Therefore, in addition to another personal guarantee and the deposit of a lien on your business property, they can ask for a physical guarantee to secure the loan. With the adoption of the second Economic Recovery Act on 27 December 2020, the EIDL loan programme was reopened to all eligible small businesses. The disparate system of utilities that small businesses rely on to survive the COVID-19 pandemic has now gone through several iterations. Many of these changes have expanded the availability of funds for businesses excluded from previous business cycles or allowed them to combine programs. The rules of who can get what can be quite confusing. Small businesses can now get a second loan from the Paycheque Protection Program (PPP), but can they get multiple EIDL loans? In addition, the company must be considered an eligible company within the meaning of the CARES Act: the most notable difference to note is that EIDL funds cannot be used to cover the same expenses as PPPs and PUAs (i.e. payroll). That said, if you want to apply for a second SBA loan, the key is to make sure that you take out loans as much as you can and that you fully comply with the SBA rules, as well as all the requirements of your lender.

The subsidy is only available to businesses in low-income communities. Eligible beneficiaries will be contacted directly by the SBA. These companies can receive between $1,000 and $10,000 depending on the amount of their initial EIDL grant. The U.S. Small Business Administration quietly began allowing those who have already applied for Economic Disaster Loans (EIDLs) to apply for more funding at the end of September. You can now get a working capital increase of up to six months, provided the total expense does not exceed the current $150,000 limit. Combining different types of SBA loans can become a little more challenging. You can combine certain types of SBA loans within limits. Although EIDL loans are non-repayable like PPP loans, they have an incredibly long term of up to 30 years with fixed interest rates of 3.75%. Since payments will be deferred until 2022, these loans offer a lot of flexibility and fill a slightly different niche than PPP loans, which are more likely to have a short-term reach. Although the SBA now allows companies to obtain both an EIDL loan and a conflict-free PPP loan, you can still only be approved once for an EIDL loan. With the most common SBA loan programs, you`re not technically limited to a single loan.

Ultimately, you could have two, three, or even more SBA loans at once. Alternative lenders are usually willing to take the second position on an SBA loan. These lenders may offer short-term loans or lines of credit that can be useful for purchasing inventory or payroll for the upcoming quarter for the month. On the 22nd. In December 2020, Congress passed the new stimulus package, which includes new paycheck protection program loans and new EIDL grants, as well as other facilitations for small businesses. To learn more about this legislation and apply for a new PPP loan, click here. In general, entrepreneurs should not overload themselves, which is why the SBA and most lenders prefer to have a gap between SBA loans. Once you`ve made good progress in repaying the first loan, there are other ways to borrow additional funds. If you can show a lender that you have rising business income and a history of loan payments in a timely manner, they are much more likely to work with you. To qualify for a second SBA loan, your first loan must be in good shape and you want to have positive cash flow, solid credit, and sufficient collateral. If the loan is less than $25,000, no; If it is more than $25,000, the company`s assets may be required as security, and if they exceed $200,000, a personal guarantee is required. No, an EIDL is not forgivable.

Only if your business dissolves or is unable to repay the money may it be possible to default on the loan. To qualify and apply for a second SBA loan, it is important to understand the credit limits of different SBA loan programs. Here are the maximum limits you need to meet if you want to get multiple SBA loans: This is usually not likely for second borrowers, as the existing debt will help you buy inventory, equipment, and other assets that you can put as collateral in the future. But if you have a low-asset business or are still driving growth, you might be struggling to get a second SBA loan. If you haven`t applied for EIDL credit yet, you can still do so. The official deadline for EIDL grant applications is December 31, 2021. However, you probably shouldn`t wait, as these programs have limited funding and it`s unclear if there will be additional rounds of funding later. You want to use an SBA 7(a) loan to expand your business to a new location. Let`s go over a few funding agreements with several SBA loans that would work: If you haven`t applied for the EIDL yet, you can do so at SBA.gov. If your business appears to be eligible, you will be asked to apply for the targeted advance.

You don`t need to accept the EIDL loan (or even be approved for the loan) to get the grant if you qualify. The American Rescue Plan, signed on March 11, 2021, includes an additional $10 billion in funding for these grants, as well as an additional $5 billion to fund an additional $5,000 in grants for businesses with ten or fewer employees that have suffered an economic impact of at least 50%. Economic loss is defined as „the amount by which the gross revenues of the captured entity decreased over an 8-week period between March 2, 2020 and December 17, 2021 compared to a comparable period of 8 weeks immediately prior to March 2, 2020 or during 2019.” The SBA will develop a formula for seasonal activities. I was told that you can`t submit 2 applications for companies with the same majority owner/lender, even if the combined companies meet the SBA criteria. How can this be handled? When you pay off an existing SBA loan, your additional financing options expand. For example, let`s say you have a $5 million SBA 7(a) loan. First of all, you cannot apply for additional funding from the SBA because you have reached the maximum. But within a few years, you`ll be paying back $1 million.

You are now eligible to apply for $1 million in new SBA 7(a) funding. One of the biggest challenges you face when applying for multiple SBA loans is showing the lender that you have enough cash to pay off all your debts. You want to be able to show the lender that you have positive cash flows, which indicates that you can keep your business running and meet your debt obligations. Of course, some SBA lenders may have policies that limit borrowers to a single loan to mitigate risk. Similarly, it may happen that a number of months pass before you can apply for a second SBA loan. If you or your business owner owns multiple businesses, be sure to discuss these affiliate rules with your lawyer, accountant, or financial advisor to understand how they may affect your ability to compete. Hello Gerri, Can the surplus of 100,000 salaries of the employees of the holding company be attributed to the other connected entity if the employees work for this connected unit? We have several employees who make over $100,000 or more, so when we gave PPP loans to the holding company, we obviously eliminated the excess of their 100,000 salaries on loan application. The question is: can we take these excess wages and apply them to the payroll of related companies, since part of their salaries is allocated/billed to this unit anyway? Hi Mrs. Gerri I have an important question about PPP and EIDL loans when I received 2 PPP loans, but it was under one of my company names and used my social security number for both, but I have an EIN number for my third company and my tax wife did not mark any other company were connected on the PPP application My question is whether I can still make an EIDL loan under Business owners can borrow up to $2 million from US dollars if your business is physically affected by a disaster (for example. B a hurricane or earthquake) or an economic injury. Most companies are eligible to seek legal action for the economic damage caused by the coronavirus and the resulting economic downturn that has negatively affected them. So if you have a $350,000 SBA Express loan and want to apply for a second SBA loan, you`re limited to a maximum loan amount of $4,650,000 ($5 million – $350,000 = $4,650,000).

The CARES Act increases the maximum amount of PPP loans to $10 million. But it also explicitly waives affiliate rules only for certain types of businesses, as mentioned above. For companies that do not waive the affiliation rules, there are no specific guidelines as to whether loan amounts would be capped at a total of $10 million for several companies classified as affiliates. However, to get a second SBA loan, you`ll likely need to meet the following requirements: This is a technical issue and our goal is to educate you about some of the issues associated with it. .