Disaster Relief Funding Programs
Financial Resources for Small Businesses

Disasters happen.  Tornados, hurricanes, fires, theft, and currently the COVID-19 pandemic cause businesses to suffer economic loss or physical damage.  When disaster strikes, where can small business owners go for assistance?

Paycheck Protection Program (PPP)

The SBA has finalized the rules on accessing a second PPP loan.  Beginning January 13, 2021, banks have been authorized to process these loans.

Like the first round, the business must have been in operation before or by February 15, 2020 in order to qualify for PPP.

In the first round, Benetrends partnered with Boefly to apply for the PPP.  Those who applied for a PPP loan via the Benetrends/BoeFly relationship  should have already received correspondence regarding the process for seeking a second PPP loan. 

For those that applied with another lender, it is recommended that they re-apply directly with their first PPP lender, as that will be the shortest path.  These lenders have emailed their borrowers instructions on the next application.  Any questions should be addressed to the lender directly. 

New Loan Incentives

There are stimulus advantages for new loans approved between February 1, 2021 and September 30, 2021.  A few key highlights include:

  • Six months of payment relief (capped at $9k a month)
  • SBA guarantee for banks increased to 90% (up from 75%)

During the last round of PPP, the SBA changed the term "approved" to "funded", which altered the timeline for borrowers. 

  • SBA guarantee fee waived for 7(a) loans

What is a fee guarantee? The SBA guarantee fee ranges from 2-3.75% of the guaranteed amount of the loan (not the total loan amount).

 It is important to understand that these changes do not change or loosen the criteria lenders are looking for.  Banks that are processing PPP loans during the second draw will likely have an impact on the timing of obtaining a loan.  Also, any payments the SBA makes on behalf of the borrower are considered non-taxable income. 

Second Draw Highlights

  • This stimulus package also includes Economic Injury Disaster Loans (EIDL).  Visit the SBA website to learn more.
  • Draws under $150k should expect an expedited process relying on certifications rather than supporting documents.  
  • Second draw loans are capped at $2M.  Like the first draw, loans are 2.5x monthly payroll; 3.5x for restaurants (NAICS 72).
  • Businesses with fewer than 300 employees and a 25% drop in sales in a quarter in 2020 compared to the same quarter in 2019 are eligible for a new PPP loan.
  • All borrowers with qualifying loans approved by the SBA prior to the CARES Act will receive an additional three months of P&I, starting February 2021 - capped at $9k per borrower per month.
  • After the three-month period described above, borrowers considered to be underserved—namely the smallest or hardest-hit by the pandemic—will receive an additional five months of P&I payments, also capped at $9,000 per borrower per month.

Applying for the PPP

For businesses seeking a second PPP loan but who require a new lender (e.g.: their first lender is not participating in the second round), Benetrends has partnered with two lenders.

BoeFly has an application link and Q&A page that can be found here.  The featured lender is designated to start processing applications in the very first wave.

Fountainhead, a leading nonbank SBA lender is working with Biz2X SBA Platform that will streamline its processes for handling second draw PPP loans.  Learn more and apply.

Other resources:

Looking for business funding?

If you are in need of funding and you have money in a
qualified retirement plan, you can use those funds for
your business without incurring upfront taxes or
early-withdrawal penalties. 

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