By Alan Wolf, YSN
While Congress wrangles over the next phase of pandemic relief, BrandSource reminds members that there are still plenty of federal funds out there just waiting to be dispensed.
Specifically, the group’s Member Relations Team urges BrandSource dealers to consider securing a low-cost loan from the U.S. Small Business Administration (SBA) through its Economic Injury Disaster Loan program (EIDL). A holdover from the first round of COVID assistance, the program was specifically designed for small business owners facing setbacks from the health crisis and now offers up to $150,000 in emergency financing repayable over 30 years at a rate of 3.75 percent.
See: Jim Ristow Explains the SBA Loans
Payments can be deferred for one year (although interest accrues during the period), and the loan can be pre-paid at any time without penalty.
Borrowers can use the funds to cover a wide range of working capital and normal operating expenses such as payroll, rent or utilities; mortgage and other debt repayments; higher supply costs; and sick leave for employees afflicted by COVID-19.
Or, as BrandSource General Manager Jarred Roy suggested, simply hold them in reserve for a rainy day.
That’s the tack that BrandSource member Jody Adams took. The owner of Adams Furniture and Appliance, with four stores in Longview, Marshall and Tyler, Texas, said applying for an EIDL loan “seemed like a no-brainer to me.” (That was especially true prior to July 11, when the SBA was doling out non-repayable advances of up to $10,000 per applicant. Unfortunately, that well has since dried up.)
“I didn’t need the money,” Adams told YSN, “so I set it aside in a separate account to be used as a credit line or if things go sideways.”
Adams said the online application process took about 30 minutes and that his bank received the funds within four days. He’ll likely hold onto the loan for a year — which will hopefully put the country well past the health crisis — and then expects to pay it back in full.
Fellow Texan and Southwest Region member Mark Lafferty of Lafferty’s Home Center in Texarkana also snapped up an EIDL loan early on, as well as Paycheck Protection Program funding (PPP), not knowing what the pandemic may bring. “We wanted to be as prepared as we could be,” he said, and on the advice of his accountant applied to all programs.
Among other things, Lafferty used the money to pay employees’ salaries during their time off for childcare, COVID testing or mandatory quarantine periods, and is keeping the rest in reserve. “We don’t know where the end of this will take us,” he said, whether its product shortages, higher prices or other challenges, “and my accountant recommended having as much cash on hand as possible.”
Sounds like a plan to us!
Members can learn more about the program on BrandSource’s EIDL tip sheet, located on the COVID Info Hub, and can apply for an EIDL loan directly on the SBA website.
BrandSource is a unit of YSN publisher AVB Inc.
