A guide to Business Disaster Assistance

Current as of press time – March 24, 2020


There are several resources available right now to Florida businesses to get them through the next few months and assist cash flow. The options available are loans which must be paid back.
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. These short-term, interest-free working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance.
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.
The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Upon a request received from a state’s or territory’s Governor, SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

Business Disaster Assistance Information
According to the Small Business Development Center at UWF, you should apply for loans in this order:
1. Your local bank
2. State Disaster Loan
3. Federal Disaster Loan
After you have talked to your local banker, or in conjunction with your local banker – apply for the Florida Department of Economic Opportunity.

STATE DISASTER LOAN
(Apply for First)
See floridadisasterloan.org for more information.

Summary:
Amount: Up to $50,000 per eligible business
Term: Up to one year (do not forget)
Interest: 0% and after one year the loan goes into default and the interest jumps to 12%
ONLY for small business with 2-100 employees
This is meant to “Bridge the Gap” until a business gets other long-term financing
Can get up to $100,000 for special cases
1. Loan Process: Fill out PDF application –You can find information on the Florida State Disaster (Bridge) Loan here: https://floridadisasterloan.org/
2. Collect required support documents: 2 years personal tax returns, 2 years business tax returns, at least two W-2s from different employees, copy of voided check, Copy of ID. If 2019 taxes are not filed, you will need 2019 Tax Extension, 2019 income statements, 2020 YTD statements
3. Send it to your local SBDC office (after completing a Request for Consulting) by mailing it to 9999 University Parkway, Pensacola, FL 32514 or share a Dropbox with them via email.

Important:
This is a first-come-first-serve LOAN. There is currently 50 million in tax-payer funds set aside. However, the governor could decide to increase the set aside. If you do not pay the loan back in 12-months, you are considered in default and it will hurt your credit. Also, any amounts due will be paid back with 12% interest. You can pay back the loan at any interval including one lump sum payment, but you must pay it back within 12-months.
The reason you apply for this one first is because you can pay off this loan with the funds you receive from a Federal Disaster Loan should you receive one. The Federal Disaster Loan has very favorable terms including up to 30-years to pay it back.
There are no collateral requirements for this loan.
Please read the eligibility requirements carefully at: floridadisasterloan.org

Federal Loan
Summary
Do this after you have applied for your bridge loan. If you are accepted, you can pay off your bridge loans with these funds.

Economic Injury Disaster Loan funded by the SBA
https://www.sba.gov/funding-programs/disaster-assistance
This is a loan given by the Small Business Administration
You can use it for working capital.
Amount: Up to $2,000,000 per eligible business
Term: Up to 30 years; case by case
Interest: Businesses & Small Agricultural Cooperatives 3.75%
Non-Profits Organizations 2.75%
Other: Collateral is required for physical loans over $25,000. SBA will not decline a loan for lack of collateral, but it requires you to pledge what is available.
Businesses were eligible to apply beginning March 19, 2020.


Florida Short-Term Compensation
http://www.floridajobs.org/office-directory/division-of-workforce-services/reemployment-assistance-programs/short-time-compensation-program-for-employers
The Short-Term Compensation Program is a voluntary employer program designed to help employers maintain their staff by reducing the weekly working hours during temporary slowdowns instead of temporarily laying off employees.


WARNING

Do NOT pay for application assistance.
Filling out Florida Bridge loans and SBA EDIL loans are free
SBDC consultants are paid through taxpayer dollars – and do this for businesses at no cost to them.

FAQ

If I have multiple businesses, can I apply for multiple loans?
-Generally, yes. If you have a business tax return for each business, you can apply.
What are typical issues resulting in a decline?
-Lack of repayment ability
Can I appeal a loan decision?
-Yes for SBA loans; No for bridge loans

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