Category: Florida Real Estate Law

The Coronavirus pandemic has caused many businesses to experience severe income loss, many already unable to cover their bottom-line business expenses. As a result, our firm has begun actively working with clients applying for economic disaster loans. Please reach out to us immediately for help in preparing your application as deadlines are quickly approaching.  Due to the urgency and time sensitivity of these applications, we are making these are highest priority.

Below is a list of the business loans that may be available to you (on a case by case basis): 

FLORIDA SMALL BUSINESS EMERGENCY BRIDGE LOAN

• Purpose: Designed to “bridge the gap” between the disaster occurrence and when the business secures long term recovery resources
• Amount: Up to $50,000.00 per small business (up to $100,000.00 in some occasions)
• Term: Requires repayment within 12 months
• Interest: 0% for the first 12 months after which interest is charged at 12%
• Eligibility:
  • Florida must be the designated disaster area
  • Must maintain a place of business in Florida and established prior to March 9, 2020
  • Demonstration of economic injury as a result of Coronavirus
  • Individual or individual who owns at least 51% equity of entity
  • At least 2-100 employees**
• Use: Proceeds MUST be used for maintaining or restating business (use of proceeds to pay off debts already incurred on case by case basis)
• Supporting Documentation Required:
  • Government ID          
  • Federal Business tax returns for the last 2 completed years
  • Employer tax documentation.
  • Personal tax returns for the last 2 completed years with attached Schedule C
  • Additional information that the applicant believes would assist the Loan Review Committee in making its decision (such as a loan summary).
• Application Deadline: May 8, 2020 – Website: https://floridadisaster.biz/

FLORIDA DEPARTMENT OF ECONOMIC OPPORTUNITY-THE REBUILD FLORIDA BUSINESS LOAN FUND

• Amount: Up to $500,000.00 in state and federal funds ($40,000,000.00 available)
• Term: Case by case basis
• Interest: Market interest rates
• Eligibility:
  • Existing and new businesses that were impacted directly or indirectly by a disaster to rebuild and expand
  • Industries identified by the state as key strategic markets for future growth and will focus on creating and enhancing the diversification and resiliency of Florida’s economy
• Use: Inventory purchases, construction or renovation, working capital needs, capital start-up loans, machinery and equipment purchases, equipment financing

SBA FEDERAL ECONOMIC INJURY DISASTER LOAN (EIDL)

• Amount: Up to $2,000,000.00 in assistance available (determined on a case by case basis but may not exceed what the applicant could have paid had the disaster not occurred)
• Term: long term prepayment up to 30 years
• Interest: 3.75% for small businesses; 2.75% for non-profits
• Eligibility:
  • Must have less than 500 employees
  • Physical presence in the disaster area
  • Substantial economic injury
  • Applicant’s credit history
  • Financial position of the business (must be able to repay loan)
  • Business’s potential to accumulate funds necessary to operate
  • Estimated loss incurred or that will be incurred
  • Businesses with credit available elsewhere are not eligible (This may be removed by approved CARE Act)
  • Must have collateral for loans over $25,000
  • Ineligible: Agricultural, religious, charitable, gambling, unclear about cannabis industry
• Use: Proceeds MUST be used to pay fixed debts, payroll, accounts payable, and other bills that are unable to be paid as a result of Coronavirus impact
  • Cannot be Used To: Refinance debt incurred prior to disaster; Service current SBA loans, Pay directly or indirectly any obligation of tax or non-tax penalty due to a violation; Pay dividends or disbursements to owners except for reasonable remuneration directly related to performance of services for the applicant business
• Step: (1) Apply via SBA website; (2) Review, verification and processing; (3) Loan closing and disbursement

• Supporting Documents Required:
  • Online SBA Application – Form 5 – To be completed online (Registration required)
  • IRS Form 4506T- Tax Transcript authorization for tax verification
  • Copy of most recently filed tax return
  • Personal financial statements for all owners of 20% or greater ownership interest – SBA Form 413
  • Schedule of liabilities – SBA Form 220
  • Current year to date profit and loss statement
• Disbursement: Initial disbursement within 5 days after approval (approval usually takes 3-4 weeks but could be more given the extent of the pandemic)
• Application: Within 9 months of state of disaster declaration

SMALL BUSINESS ASSOCIATION 7(A) (Loans given not specifically as a result of Coronavirus)

• Amount: Maximum of $5,000,000.00
• Term: Maximum of 25 years
• Maximum Guarantee: 85% for loans up to $150,00.000 and 75% for loans greater than $150,000.00
• Interest: Negotiable
• Eligibility: Case by case basis.

CARES ACT (initial proposal-not yet approved)

• EIDL CHANGES:
  • Extension of EIDL Loan availability to $10 Billion.  
  • Waiver: Creates waiver of personal guarantee for loans of less than $200,000.00
  • Emergency Grant: Creates emergency grants of $10,000.00 to be distributed by SBA within 3 days while an application is pending. No repayment even if denied EIDL loan.
  • Eligibility:
    • Nonprofits with fewer than 500 employees
      • Business must be in operation on March 1, 2020 and had employees for which it paid salaries and payroll taxes
  • Basis is only on credit score
  • Use: Proceeds MUST be used for working capital, payroll support, salaries, mortgage payments, rent, utilities, and certain other existing debt obligations

• SMALL BUSINESS INTERRUPTION LOAN PROGRAM
  • Purpose: to cover the period of time from March 1, 2020 to December 31, 2020. Designed to ensure employees are paid even as their employer’s business is currently closed
  • Amount: Government to make available $350,000,000,000.00 in guarantees to obtain loans to cover expenses during Coronavirus Pandemic. Maximum to business is an amount equal to 4 times the borrower’s total monthly expenses (monthly average over last 12 months) capped at 10 million
    • Expenses include payroll, mortgage, rent, payments on other debt obligations
  • Interest: No more than 4%
  • Waiver of Fees: SBA to waive all applicable fees.
  • Deferment: Lenders required to defer payments for not less than 6 months
  • Loan Forgiveness: Equal to the costs incurred or payments made by borrower during an 8-week period after the origination date of the loan including:
    • Payroll costs
    • Interest payments on any mortgage (existing prior to Feb 15, 2020)
    • Rent payments (after Feb 15, 2020)
    • Utility service payments (service began before Feb 15, 2020)
    • Forgiveness reduced by reduction in employees or reduction in employee pay greater than 25%
    • Borrower will not be penalized for reduced payroll if borrower rehires workers previously laid off (unclear as to time limits)
  • Eligibility:
    • No more than 500 employees (applies per physical location unless gross receipts exceeds $500,000,000.00) Standard cannot be more than 500 employees in the aggregate of all affiliates.
    • Cannot be receiving other assistance related to the Coronavirus Pandemic, any pending application will eliminate availability of SBIL
    • Not limited by geography or to states that have been declared as disaster areas
  • Use: Paid sick leave, group health care benefits, employee salaries, mortgage payments, rents, utilities, payment of other debt obligations.
  • Application: Accepted through SBA qualified lenders

• EXPANSION OF SBA EXPRESS LOAN PROGRAM
  • Approval or denial within 36 hours
  • Can be a term loan or line of credit
  • Amount: Maximum of $350,000.00 to be increased to $1,000,000.00 then reduced to $500,000.00 after December 31, 2020

• EXPANSION OF MICROLOAN PROGRAM
  • Loans up to $50,000.00 made through nonprofit lending organizations directed to underserved market applicants
  • Average loan size of $14,000.00

• SBA LOAN DEFERMENT FOR EXISTING LOANS
  • Secondary Market Loans: Up to 6 months
  • Loans Not Sold on Secondary Market: Lender can use the Colsons Customer Service Online Request for deferral of less than or equal to 12 months, including lender notification of unilateral 3-month deferral
  • SBA 504 Loans: The amount deferred should not exceed 6 cumulative monthly payments or 20% of original loan amount whichever is less         
  • Borrower financial info will be reviewed prior to deferral to ensure cash flow problems are not long term
  • If loan is more than 60 calendar days past due and problems appear long term deferral will not be granted
  • Interest will continue to accrue during deferment period with payments optional

• FEDERAL RESERVE-MAIN STREET BUSINESS LOANS
  • Details not yet available but will be a direct lending program from the federal reserve to businesses

FL DEPT OF ECONOMIC OPPORTUNITY-SHORT TIME COMPENSATION PROGRAM

• Term: 12 calendar months
• Eligibility:
  • The employer must describe a plan for giving notice, if feasible, to an employee whose workweek is to be reduced, together with an estimate of the number of layoffs that would have occurred absent the ability to participate in STC.
  • Participating employees must be full-time (at least 32 hours per week prior to Short Time Compensation reduction), permanent employees (not seasonal) and the employees must have a set number of hours (excluding overtime) that they work each week in order to participate. Employees paid piece rate, on commission, or who are hired to do certain jobs regardless of the time required are not eligible for participation.
  • Short Time Compensation benefits are payable when normal hours of work are reduced from 10-40 percent. If normal work hours exceed 40, the percentage will be based on 40 hours.
  • Each week that Short Time Compensation benefits are claimed, at least 10 percent of the employees from the total staff or within a particular unit must be working reduced hours. (Two employees is the minimum for a staff or unit of less than 20 employees.)
• Use: to retain employees during a temporary slowdown, avoid the expense of recruiting, hiring, and retraining new works when business resumes, a transition to layoff
• Application: Requires log in.

FACEBOOK SMALL BUSINESS GRANTS PROGRAM

• Amount: $100,000,000.00 in cash grants and AD credits determined on a case by base basis
• Eligibility: Details to come
• Use: Proceeds may be used to assist with rent, keep workforce, connect with more customers, and cover operational costs.
• Application not out yet, can sign up on https://www.facebook.com/business/boost/grants?ref=eml to obtain updates

STATE BANK OF INDIA

• Emergency Credit for existing Borrowers affected by the Coronavirus outbreak
• Amount: up to ₹ 200 crore or 10% of existing fund based on working capital limits
• Term: 12 months
• Interest: 7.25%
• Eligibility:
  • Current standard account
  • Account not classified as SMA 1 or 2 as of March 16, 2020
• Deadline: June 30, 2020

Please note many of the loan options above are provided on a case by case basis and are not set in stone, as they are changing depending on what is available, and the laws being enacted. It is important you understand your options and the loan terms being offered during this period.

We are immediately available to assist you through the application process, contact Gulati Law at 407-900-5054 to get started immediately. We recommend getting your applications in as soon as possible as processing can take weeks.