There is a lot of information being passed around, hopefully, this summary below will give you a clear picture of where we are, what is available, and how to proceed. Please keep in mind this is a very fluid situation and details are subject to change. So this is just a snapshot of where we are now.
There are only three options currently for Florida businesses
Option 1: Request an SBA Loan Deferment from the bank: our CenterState Bank SBA Borrowers can request a deferment
Option 2: The SBA Economic Injury Disaster Loan (EIDL): Apply directly with the SBA (the bank is not involved)
Option 3:The Florida Small Business Emergency Bridge Loan Program: Apply directly to the State of Florida, up to $50M available, no interest, no monthly payments, full repayment of the loan at end of 12 month period. Again, the bank is not involved.
Pending (legislation not passed as yet):
o The CARES Act is the proposed legislation that will provide funds, through an SBA loan, that will be administered through the banks. This legislation has NOT passed and as such, is not available. In the current form, the proposed legislation would provide a loan of up to $10,000,000 that can be used towards payroll, fixed debt payments and rent among other things. The way the bill is proposed currently the Borrower would be eligible for some debt forgiveness if they keep their payroll levels the same as they were prior to receiving the loan.
An important thing to note is that at this time, a business can only elect ONE loan choice between the EIDL and the CARES Act (when it becomes available). They cannot borrow from both funds. Since the CARES Act is not finalized nor has it passed, it can become difficult to make a choice.
If your client is in need of help right now I would urge them to make sure their financials are complete and to go online and apply for the EIDL. Processing takes time, and the hope would be that the application is in the process while the CARE Act is finalized, and then the borrower can make a more informed decision. They can always cancel their EIDL application (I believe based on current information) should they determine the CARES Act (when it is finalized) is more beneficial.
Again, business owners should be encouraged to gather their financial information and have it ready. I would encourage every business owner to make sure that they stay on top of maintaining a complete file of their financials so that they can act quickly.
You can apply directly to the State of Florida.
The Florida Small Business Emergency Bridge Loan Program is currently available to small business owners located in all Florida counties statewide that experienced economic damage as a result of COVID-19.
The Florida Small Business Emergency Bridge Loan Program is not designed to be the primary source of assistance to affected small businesses, which is why eligibility is linked pursuant to other financial sources. Note: Loans made under this program are short-term debt loans made by the state of Florida using public funds – they are not grants. Florida Small Business Emergency Bridge Loans require repayment by the approved applicant from longer term financial resources.
Additional SBA Loan Details:
Designated Disaster Areas: All Florida counties statewide per Executive Order 20-52.
Qualified Applicant: Applications will be accepted by qualified for-profit, privately held small businesses that maintain a place of business in the state of Florida. All qualified applicants must have been established prior to March 9, 2020, and suffered economic injury as a result of the designated disaster. Qualified small business applicants must be an employer business with 2 to 100 employees.
Amount: Up to $50,000 per eligible small business. Loans of up to $100,000 may be made in special cases as warranted by the need of the eligible small business.
Term: 1 year.
Limitation: Only one loan may be made per eligible business. All previous bridge loans received MUST be paid in full.
Interest Rate: Loans will be interest-free for the loan term (1 year). The Interest rate will be 12% per annum on the unpaid balance thereafter, until the loan balance is repaid in full. Loan default is subject to a normal commercial collection process.
Application Period: Applications will be accepted by qualified Florida small businesses under this program through May 8, 2020, contingent on the availability of funds.