What’s in CARES packages for local small businesses

BLYTHEWOOD/FAIRFIELD COUNTY – As many of Blythewood and Fairfield County’s small ‘non-essential’ businesses were placed under mandatory closure orders by the Governor Tuesday evening (Gov. Henry McMaster Orders Non-Essential Businesses Closed Throughout S.C.), others in town were already closed by the limitations of social distancing. The revenue is drying up quickly all down the street, and the rent and mortgage bills were due Wednesday.

The small business owners say they need checks, specifically the checks that are part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the $2 trillion emergency stimulus bill Congress passed in response to the pandemic.  And they need those checks yesterday.

According to an article in the Washington Post Wednesday morning, it is expected that most businesses will be able to apply for the Payroll Protection Program small business loans/grants online through an approved borrower, and that checks will be issued on the day the application is made.

While President Trump stated in a press conference Monday evening that the applications for the loans/grants will be available on Friday, local lenders and borrowers were, on Wednesday, still awash in confusion and questions about what’s required in those applications, who can apply, how they determine how much to apply for, what the money can be used for and when the checks will arrive.

Allen George, vice president/commercial banker for Blythewood’s First Community Bank on Main Street, a certified lender for small business loans through the Small Business Association (SBA), said Wednesday that he doesn’t yet know the specific application process or when checks will arrive in the hands of the borrowers, but he expected to be part of a bankers’ conference call later that day that he said he hoped would iron out the specifics.

George said the SBA loans can be turned into grants if borrowers use the funds equal to the amount borrowed to pay eligible business costs like payroll, rent, mortgages and utilities. He said it would be available to sole proprietors and freelancers as well.

He stressed to small business owners that the Payroll Protection Program, however, is not the only part of the stimulus they should be looking at.

“Another similar loan/grant, is the Economic Injury Disaster Loan (EIDL), an emergency fund available online right now through the SBA. One of my customers filled out the application for the EIDL online Monday, was approved in less than 24 hours and he expects to get his check Friday,” George said. “The good thing about it is that it’s a ‘loan’, up to $10,000, that is a grant. As long as you use it for payroll, it doesn’t have to be paid back under any circumstance.”

“The application is simple, and it may meet the needs of some of my smaller clients better than the Payroll Protection Program,” George said. “You can do both, but you can’t double dip. If you are granted $5,000 for payroll under the EIDL loan, you can still apply for the Payroll Protection Program, but you can’t pay those same employees with the dollars from the Payroll loan.”

“I don’t know how they’re going to track all that,” George said, “but the quick turnaround on the EIDL is very good.”

 “But I haven’t seen the application for the PPP yet,” he said. ‘What I don’t know is if borrowers will apply straight to the SBA website or if they will go to our website to fill out the application.”

According to the Treasury’s fact sheet for lenders, they will only have to verify that a borrower was in operation on Feb. 15, that it was paying salaries and payroll taxes at that time and their average monthly payroll expenses. On the loan application, the small business borrowers will have to provide payroll data and make a good-faith certification to the validity of the information provide.

Also according to the fact sheet, small businesses and sole proprietorships can apply starting Friday, April 3, for loans from SBA-approved lenders. Independent contractors, freelancers and self-employed individuals can apply starting the next Friday, April 10.