Note: We’ll update this page as more information becomes available. Post comments and questions below.
The new CARES Act provides financial assistance to small businesses affected by COVID-19, including travel agencies and travel agents. Our friends in the Disney travel agent community have been significantly impacted by the outbreak, so we thought it’ll be helpful to summarize the help available, and how to get started.
The Small Business Administration has two main programs in response to COVID-19:
Here’s a short summary of the two new programs, including their pros and cons. We’re not accountants, so you should discuss these programs with your accountant or CPA to see which is best for your situation.
It’s also helpful to start gathering these documents:
- Your most recent personal and business tax returns (1 year at a minimum, up to 3 years)
- Documents related to payroll costs, rent, mortgage interest, utilities, and healthcare costs
- Business registration documents, such as Articles of Incorporation
The programs cover small businesses (such as S-Corps and LLCs), independent contractors, sole proprietorships, and the self-employed.
Economic Injury Disaster Loans (Available now)
- Immediate $10,000 advance that doesn’t have to be repaid, even if you don’t qualify for a loan
- It’s a one-step process
- You can apply for this advance and the Paycheck Protection Program at the same time, as long as the funds aren’t used for the same purpose
- Loans of up to $2 million
- Fewer restrictions on business expenses than the Paycheck Protection Program
- Long payback time for amounts beyond the $10,000 advance (up to 10 years)
- Interest rate capped at 4%
- Loans have to be paid back, even if used for payroll (unlike the Payroll Protection Program)
Paycheck Protection Program (Starts April 3, 2020)
- Covers expenses including payroll, rent, mortgage interest, utilities, and healthcare costs
- The loan amount will be 2.5 times your average monthly payroll between February 15, 2020 and June 30, 2020
- Loan will be forgiven if used for the expenses listed above, even though the loan amount is calculated using just payroll
- Only available for expenses through June 30, 2020
- Applying is a two-step process, first through the SBA link above, and then through a participating lender bank
- Payroll reimbursement per employee capped to a pro-rated amount equal to $100K annually
- Non-payroll costs above 25% of the loan will probably not be forgiven
Besides these, there are other programs such as debt relief for existing SBA loans that may also help. If you’ve got an existing loan, check with your lender for details.
Again, we’ll update this page as more information becomes available. Let me know if there’s anything else we can help with: firstname.lastname@example.org or leave your comments and questions below.