HOW TO GET THE SPECIAL LOANS AVAILABLE FOR COVID-19 EFFECTED BUSINESSES

​The globe has seen a devastating economic impact as the Covid-19 outbreak has been a disease spreading drastically. Owing to the negative impact the Covid-19 pandemic has caused on most businesses the globe has then suffered a huge threat in its economy.
In an attempt to manage the spread of this deadly virus most countries issued total lockdowns in their entire region, restriction of traveling across countries globally, which is a major means with which most businesses generate their revenue. The businesses that were not remotely organized were perpetually shut down and only those that offer very essential services were left open with strict principles of operation leaving the global economy adversely affected.
Some of the businesses that were negatively impacted by the Covid-19 pandemic include:

Hospitality Industry:

​This industry/business sector gets its sales mostly from people that are used to traveling, as they find a place to lodge and rest. Since a total restriction was placed on traveling within a country and overseas, businesses were shut down, and social distancing was ensured, this business sector suffered a deep loss in its revenue, also, its workers were affected; as some were sacked from work and others suffered a loss in hours of operation. It is no doubt that this business sector is one of the major industries that received the hardest strike because of the lockdown and travel restriction that constrained travelers from across the nation and the globe.

Tourism and Aviation:

​This business sector is also one of the eminent industries that got struck hard, as there was a little in demand among travelers because of the lockdown and travel restrictions. A good number of both the developed and underdeveloped countries with local and foreign airlines have suspended all activities, with the entire airport in each country under a shutdown according to the order given by the Federal Government. A report that was circulated in March by the International Air Transport Association (IATA) gave an estimate of the loss the business sector suffered from a figure which was roughly over $252 billion in the globe altogether.

Real Estate and Construction:

The restriction order the federal government gave on the masses movement and the policy that was also introduced which entails 2 meters distancing (social distancing) seriously affected the possible rendered services in construction activities in the globe entirely with individuals and organizations trying to introduce safety measures that will help them manage the spread of the virus. Also, only a little number of property buyers will attempt to acquire houses since there is already a loss of interest due to the negative impact Covid-19 caused in the world economy, which includes; drop in income, loss of jobs, and loss in hours of operation.

Cinemas and Entertainment:

​One of the big industries that also have a vast urge from the masses is the Film and Entertainment Industry. In general, this industry has experienced a significant negative impact; most of the activities carried out in the cinema could not function, including movie theatres, movie premiers, musical concerts, and art exhibitions that have been equally canceled while some postponed. The Covid-19 outbreak so many strikes this industry negatively to the point of the business sector losing a multi-billion worth of deals.

Trade:

The trade sector can't escape through the negative impact the Covid-19 has caused in the world economy, this is owing to the shutdown order given by the federal government on factories, the shutdown order on the factories caused limited access to commodities and raw materials due to the challenged faced in the supply chain. Due to the lockdowns, closure of seaports, and closure of borders billions of dollars will be lost on imports and export trade. China, a major country which with its current integration is crucial to worldwide trade in the main supplier and value chain and buyers of average inputs, its trade will likewise be affected due to the disruption it is dealing with in respect to the disease.

Oil and Gas Industry:

​This industry is also largely affected by the Covid-19 outbreak, the restrictions given on movement have led to a huge drop in the oil demand, it has also led to a drop in the prices of crude oil around the globe. Many attempts were made to help balance the loss and profit of the Oil and Gas industry, one major attempt was the coming of the Organization of the Petroleum Exporting Countries (OPEC) and other top oil-producing countries through a means called output cut, all these have still not helped in improving the negative impact Covid-19 caused on the industry nor stabilize the industry market.

Manufacturing:

​The lockdown order which also triggered low purchases from customers, the shutdown of factories and production lines have also hurt the manufacturing sector.

Consultants and Services:

Another sector that is negatively affected is the Consultant and Service provider. The crash in revenue by government institutions and companies which is due to the meltdown in the global economy resulted in tightened budgets which perpetually affected the consultants negatively.

Start-ups and Small businesses:

Many businesses were likewise affected by the lockdown order given by the government because of the covid-19 outbreak. Business people were forced to take quick actions to maintain their status and position in the business. Startups have been left as one of the most vulnerable businesses due to the preventive measure taken by the government to curb the spread of Covid-19.

SPECIAL LOANS AVAILABLE FOR COVID-19 AFFECTED BUSINESSES

Many businesses find it very difficult to accurately analyze how their gross income will be affected by COVID-19 owing to a series of unidentified factors the pandemic has caused.
One of the noticeable products of Covid-19 is the huge economic shock it has brought on so many businesses and the world as a whole; nevertheless, the coronavirus will also convert and affect business in some other ways.
Some businesses that involve in technologies and shopping platforms will continue to make sales and keep playing a fresh important position even after the Covid-19 pandemic has wiped off, while businesses whose sales depend on shifting location and face-to-face interaction would be suffering from broken sales and incomes.
In the tip of March, several businesses complained that their sales revenue dropped back by about minus 6 percent in respect to the coronavirus-related development
Due to the disaster, the Covid-19 pandemic has caused to the majority of businesses run around the globe, certain loans are then made available to support these businesses from running bankrupt.
The special loans made available for business affected by the Covid-19 pandemic are listed below:

A. CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS):

​The Coronavirus Business Interruption Loan Scheme (CBILS) can make available facilities that are up to five million euros (E5m) for business with smaller revenue across the United Kingdom; the British Business Bank’s roster of 40+ accredited lenders is the means with which the Coronavirus Business Interruption Loan Scheme (CBILS) is delivered. The range of business finance facilities supported by the Coronavirus Business Interruption Loan Scheme (CBILS) includes overdrafts, term loans, invoice finance, and asset finance. CBILS was launched at the tip of March and will be accessible for applications within the time frame of six months, there is likewise a possibility that the six month period of application extend if the Covid-19 pandemic period does not stop).
FEATURES OF THE CBILS SCHEME

• A Maxima loan of E5M: The highest value of loans provided to the affected businesses under the CBILS scheme is E5m.
• No payment required to access the scheme: For this particular loan, the government will not charge any applicant be it businesses or banks
• Guarantee up to 80%: Applicants would be provided with a guarantee of 80% on each loan (this guarantee is subject to a restriction for each applicant)
• Repayment terms: For term loans and asset finance the period of repayment is from three months up to a duration of six years while the repayment periods for revolving facilities and invoice facilities are up to three years.
•  The government will pay the interest and fees for 12 months: The Government will set up a “Business Interruption Payment” to help the applicants pay the first 12 months of interest payment, and any applicant levied fees, in some cases.
• Security:  Although an existing security interest will not exempt a business from the scheme, the bank may make up their mind to take protection over a business’ assets. For facilities that are over E250,000, the applicant may require a personal guarantee from a director or shareholder, but the guarantee will exclude the Principal Private Residence (PPR) and recoveries under the guarantee will be capped at a maximum of 20 percent of the outstanding balance of the CBILS facility.  

WHO IS ELIGIBLE TO APPLY UNDER CBILS?
For the Coronavirus Business Interruption Loan Scheme, the government gave certain principles that show eligible individuals  

• Applicants' business must be based in the United Kingdom with a profit not more than 45million euros.
• Applicants must not fall into the following categories: (i) insurers and reinsurers (but not insurance brokers), building societies, banks, (ii) primary and secondary schools funded by the state and other public sectors (iii) trade unions, professional, religious, employer, political or religious membership organization.

HOW TO APPLY FOR CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME (CBILS)

• You will need to visit the CBILS portal
• You will need to answer a few questions about yourself and your business on the CBILS page; this will only take about 2-3 minutes.
• You will also need to submit the following documents, so do ensure that you have the following documents on hand; (i) last six months’ bank statements (ii) Latest statutory accounts (iii) Management accounts for the year ending 31 December 2019, including P&L and balance sheet.

Once your proposal is approved, the Coronavirus Business Interruption Loan Scheme (CBILS) will email you your offer with an attached link to accept it. After doing this you would be able to sign the necessary legal documents online straight away so the loan proposal can be carried on.

B. CORONAVIRUS BOUNCE BACK LOAN SCHEME (CBBLS):

The United Kingdom declared a special loan with the name “Bounce Bank Loan” scheme (CBBLS) this loan will be dispensed through a government network of purported “accredited lenders”, including all the important financial institutions already included on the government’s list of accredited for CBILS.
FEATURES OF THE CBBLS SCHEME

• Maxima Loan available is E50, 000: fifty thousand euro is the highest value available under the Coronavirus Bounce Back Loan Scheme (it could also be 25 percent of annual turnover if this is smaller), with the last loan of E2, 000. This is an important lessening to the E5m borrowing limit under the CBILS scheme.
• The loan has a 100 percent guarantee: For each loan, there would be a 100 percent guarantee from the government, unlike under the Coronavirus Business Interruption Loan Scheme where only 80 percent of each loan is covered by the government which is yet subject to pre-lender caps on claims.
• Term and repayment: For the Coronavirus Bounce Back Loan Scheme, the maximum loan term is up to six years, like under the Coronavirus Business Interruption Loan Scheme (CBILS).
• Interest and fees: After the initial 12 month period, the government has agreed to a specific interest rate of 2.5% per annum with all applicants. The loan will be free of interest and there would be no repayments or fees will be due for the first 12 months.
• Security: It is thought to be of a low tendency that applicants will need security for loans of the E50k limit or less.

WHO IS ELIGIBLE TO APPLY UNDER CBBLS
Any business that is in alignment with the following criteria can apply for the Coronavirus Bounce Back Loan Scheme (CBBLS):

• The business is based in the United Kingdom in its business activity.
• The business has been negatively affected by the Coronavirus outbreak
• The business must be a going concern before the Covid-19 pandemic; this means that the business must have been executable.
• Business not eligible to apply under the Coronavirus Bounce Back Loan Scheme (CBBLS) includes; banks, insurers, and reinsurers (but not insurance brokers), public sector bodies, or primary and secondary schools funded by the state.

HOW TO APPLY FOR CBBLS?

• Approach your lender: Lenders that partake in the scheme include HSBC, Barclays, and Natwest. You are expected to meet the bank you are using currently for finance. Also, nothing is constraining you from going somewhere else if your lender is not ready to give you finances.  
• Complete self-certification: You will need to self-certify that you are qualified for the Bounce Bank Loan when you apply for a loan. If your business qualifies, the British Business Bank (BBB) analyzes that the application will be subject to appropriate customer fraud, Know Your Customer (KYC), and Anti-Money Laundering (AML) checks.
  
• Your lender will make a decision: Your lender will have to choose whether to offer you finance. Your lenders are not permitted to ask for a personal guarantee and the loans are guaranteed 100% by the government. Your lenders could go after other personal assets, although they cannot take recovery steps on the main home of sole proprietorship traders or primary vehicles or members of partnerships. Your business is still liable for all of the debt and repayments, although there is a 100% guarantee from the government.

C. OPEN FOR BUSINESS LOAN PROGRAM:

The Covid-19 pandemic has negatively affected many local and small businesses in the Kerr-Tar Regional. The Kerr-Tar Region Council of Governments then attempted to help the businesses in this region with a loan program known as “Open for Business Loan Program.” This reason this loan program is set down is to assist the business that is still small and medium based on their revenue to recuperate from the negative effect the Covid-19 economic
FEATURES OF THE OPEN FOR BUSINESS LOAN PROGRAM

• The Open for Business Loan Program is administered locally; it is funded by the US Department of Commerce, Economic Development Administration with funds from the Coronavirus Aid, Relief and Economic Security (CARES) Act.
• There would be a need for additional collateral and a personal guarantee
• The loan is only permitted to be used for working capital or equipment
• To access this loan, you would make a $200 application fee.
• The period of standard loan varies from 5 – 10 years.
• If flexibility in the payback period is requested, it will be considered and approved by the COG Board
• Proximity to downtown regions and years of business activeness are put on a balance and examined for approval of the loan.

WHO IS ELIGIBLE TO APPLY UNDER OPEN FOR BUSINESS LOAN PROGRAM
Open for Business Loan is a non-venial interest-free loan, which ranges from $10,000 - $100,000.

• Businesses that are small and medium base on their generated revenue with employees ranging from 1-99.
• The Business must have been functioning for at least a year
• The business must be located in the following region; Franklin, Person, Granville, Warren, or Vance countries.
• There must be the availability of documentation that proves the business have suffered loss during the cause of the Covid-19 outbreak

HOW TO APPLY FOR OPEN FOR BUSINESS LOAN PROGRAM

• Visit the Kerr-Tar COG official website at www.kerrtarcog.org or make a call to 252-436-2040; Kerr-Tar Regional Council of Governments.
• On the page, you click on Open for Business Loan Program
• You would be directed to another page, click on the “Open for Business Loan Application (Online)
• You can either fill the form online or print the form and fill it manually
• If you choose to fill the form manually; forms are expected to be resubmitted to the Kerr-Tar official website after being filled. 

D. PAYCHECK PROTECTION PROGRAM (PPP)

The Paycheck Protection Program is a loan made available to provide a direct bonus for small businesses to still help their workers remain on the business payroll. The Paycheck Protection Program was originally raised with a sum of $350 billion intended to help small businesses in the United State of America with eight weeks of cash-flow aid via 100 percent guaranteed loan from the federal government. The Paycheck Protection Program loans are strengthened by the Small Business Administration (SBA).
FEATURES OF THE PAYCHECK PROTECTION PROGRAM (PPP)

• Paycheck Protection Program loans are extended to small businesses, sole proprietorships, independent contractors, and self-employed individuals.
• All small businesses in the United State are eligible
• There is a due date rate of the loan which is 2 years and an interest rate of 1 percent.
• Until the applicant forgiveness application is looking into, or 10 months after the applicant covered the period expires, there is no need to make loan payments.
• Personal guarantees and collateral are not required.
• The applicant doesn’t need to make any payment to access this loan
• Starting from the loan originating date the PPP loan takes responsibility for expenses for 24 weeks (if the obligation started before the 15th of February 2020)
• The PPP loan can fundamentally transform into a grant that would not be taxed and the loan can be forgiven.

WHO IS ELIGIBLE TO APPLY UNDER PAYCHECK PROTECTION PROGRAM

• Any small business is eligible for a PPP loan of up to $10 million from the Small Business Administration’s Paycheck Protection Program
• If the business operation is located and administered in the United States
• It was operating before the 15th of February
• If the business has workers being paid monthly salaries and payroll taxes or the business employ independent contract
• Self-employed, tribal business concerns, tax-exempt veterans’ organization, tax-exempt nonprofits also qualify for the PPP loans.
• Some companies are not based in the United States, but has U.S based workers may be eligible for the Paycheck Protection Program loan.

HOW TO APPLY FOR PAYCHECK PROTECTION PROGRAM

• The business may apply for a Paycheck Protection Program loan via an eligible lender, which could either be a bank or other financial institution with whom the applicant has a legit relationship.
• Applicants are to submit a Small Business Administration (SBA) Form 2483 (Paycheck Protection Program Application Form) and payroll corroboration.

E. ECONOMIC INJURY DISASTER LOANS (EIDL)

​The Economic Injury Disaster Loan is set down to assist small businesses to gain victory over the momentary loss of gross they are encountering because of the Covid-19 pandemic. The Economic Injury Disaster Loan is fundamentally brought about for businesses to use in paying fixed debt, account payable, payroll, and other monetary bills that can be paid because of the pandemic (and that the Paycheck Protection Program loan did not already cover).
FEATURES OF THE ECONOMIC INJURY DISASTER LOAN (EIDL)

• Maximum Loan Length: The maximum duration of the Economic Injury Disaster Loan is 30 years.
• Interest rate: The interest rate for the EIDL cannot exceed 4 percent of the amount lend
• Highest Amount Lendable: Although the amount lendable is based on the potential of the business to repay the loan, the highest amount that is lendable under the EIDL is  $2.0 million
• The EIDL includes a maximum of $10,000 forgivable advance.
• The prepayment penalties, payment frequency, and maximum loan length vary for all businesses.
• Loan advance is expected to come in a few days after a successful registration

WHO IS ELIGIBLE TO APPLY UNDER THE ECONOMIC INJURY DISASTER LOAN (EIDL)

• In response to the drop in the economy and loss in revenue for many businesses Covid-19 has caused, small business possessors, which include nonprofit organizations and agricultural businesses in all states in the United States, can apply for Economic Injury Disaster Loans.
• The business is established for making a profit
• The business operation is carried out in the United States or has an important contribution to the United States via tax payment or usage of American products, labor, or materials.
• The business operation is carried out in the United States.
• The business is independent in its operation and possession.
• On a national basis; is not dominant in its expertise.

HOW TO APPLY FOR THE ECONOMIC INJURY DISASTER LOAN (EIDL)

•  Make an application directly on the Small Business Administration website
• The application takes an average of two hours for completion
• When applying make available the following information
  1. Information that pertains to your standard business identification, i.e. business, legal name, organization type, SSN/EIN.
  2. Ownership details
  3. 12 months  gross revenue before the covid-19 pandemic
  4. Costs of materials traded for the 12 months before the disaster
  5. Lost rents due to Covid-19 pandemic
  6. Any recompense you received from other sources because of the damage Covid-19 caused.

Note: If you didn’t hear back after you might have completed the application don’t reapply, it’s possible that the SBA is receiving so many applications and this may result in a slow response to the submitted application. Reapplying could make you disqualified for the EIDL scheme because there is a tendency that the SBA flag you as a duplicate applicant.

F. SBA EXPRESS BRIDGE LOANS

Businesses that already have a standing relationship with SBA Express Lender are helped by the SBA Express Bridge loan to speedily get a loan up to $25, 000. The SBA Express Bridge loan aims to help small businesses overcome any momentary loss of revenue they are encountering because of the Covid-19 pandemic.
FEATURES OF THE SBA EXPRESS BRIDGE LOANS

• An evaluation is made to borrowers with criteria such as tax, credit scores, and banking information
• The maximum amount lendable is $25,000
• The loan in its nature is “Fast turnaround”
• 6.5% is the highest rate that lenders can charge over the prime rate
• Base on the borrower; the interest rate can be variable or fixed.
• The application fee for the SBA Express Bridge loan is $250
• For any late payment, fee charges cannot exceed 5 percent of the payment scheduled.
• The longest term for this loan is six years.

WHO IS ELIGIBLE TO APPLY UNDER THE SBA EXPRESS BRIDGE LOANS

• The business operation must be carried out in the United States
• Businesses must be able to tender evidence about how the Covid-19 pandemic caused harm to their revenue.
• In revenue, small businesses must have maximum revenue between $750,000-$35.5 million and workers within the range of 100 – 1500 employees.
• There must be a banking relationship between the business and an SBA Express Lender
• There must be a copy of the current bank statement or other documents to prove the banking relationship

HOW TO APPLY FOR THE SBA EXPRESS BRIDGE LOANS

• Your Small Business Scoring Service score must be at least 130 (the tendency is that the number change in the future)
• You must present IRS Form 4506-T to the IRS to have the business’s tax transcript. Then present that transcript to your lender.
• You would have to check your credit score for mistakes because the lender will check your credit score.
• You would have to attain a standard of SBA 7 (a) qualification for a loan.

Note: To apply get in touch with your lender to confirm if they offer Express Bridge Loans, you can also check out the list of lenders offering Express Bridge Loans from the Small Business Administration (SBA).