- Fed Focus on Credit Market Support and Middle Market Business Loans
- The Fed is using its arsenal of liquidity enhancing maneuvers to ensure the credit markets function properly – these include quantitative easing corporate bond buying, municipal bond buying, and a new program aimed at main street business.
- The main street business program will purchase loans originated by banks. This is an extremely positive development for the middle market.
- This will ensure that the bank credit window continues to function during this uncertain period.
- Proposed Senate Bill Targeting Main Street Business Lending
- Senate bill proposed by the Republican leadership includes $350 billion in loans for small & mid-sized businesses to cover payroll, rent and some other expenses for the next four months.
- Program would be for loans up to $10 million for companies with less than 500 employees.
- While passage is uncertain – this is a very positive development.
- Proposed Senate Bill Targeting Main Street Emergency Grants
- Senate Bill proposed by Democratic Leadership includes $600 million in grants and is focused on smaller mom & pop shops and mid-sized businesses.
- Grants would be converted into loans unless the business restored their payroll to 80% of pre-crisis level.
- Money to be spent on payroll and fixed costs.
- While passage is uncertain – this is a positive development.
- Small Business Administration Disaster Loans are available
- The SBA has allocated $50 billion to business in designated disaster loans.
- Loan sizes are up to $2 million and terms can extend for 30 years.
- Requested forms include prior year tax returns, owner personal balance sheet, and other tax release forms. Contact us for a full pack of required forms.
Things to consider:
- Get your financial statements and tax returns in order before applying.
- Prepare a short executive summary no more than 3 pages long.
- Calculate the level of lost profit if you keep staffing intact for the remainder of 2020.
- Your revenue projection should anticipatelower levels of revenue, even once the pandemic is over.
If you have any questions on any of this, we can help so please give us a call.