At Meda, we are thinking about how to ease your mind as you apply for additional capital and lending for your small business. Today, we are spotlighting our recently aired Facebook Live from April 10th with Patrick Pariseau; Meda’s Director of Financing Solutions. He is an excellent resource for small business owners, and he shared some of the most important information you need to know in the market today. Patrick begins by explaining which programs to look into:
Tips From Patrick
In terms of the application process Patrick explains the most important tips and what to avoid.
1. Apply For All Funding Opportunities
“We recommend to every business that they should be moving ahead and trying to make sure that they are applying for all of these products and all of these loan fundings.”
“An hour of your time probably will net you ten thousand dollars in capital.”
Patrick recommends applying for all three programs. Meda is here to help in the application process. If you have any questions, please contact us. Patrick believes that with clarity in the process, capital is going to be given to your business. Capital is an equal word to funding. The SBA is creating the above-mentioned programs to help small businesses going through economic difficulties during the time of COVID-19.
2. Prioritize What Needs to be Paid Off Now
“It’s important to pick priorities for your business. Do not short-roll yourself on payroll taxes.”
“You need to be selective; you need to be talking to your landlords, you need to be talking to your vendors.”
Look at your company’s outstanding bills and organize which ones need to be paid first. Patrick says that the most important priority is paying your payroll taxes. Do this before anything else. If your restaurant, for example, was forced to close due to the shelter-in-place order, you may have food vendors who continue to be on your payroll. They are an example of vendors, and you should discuss with them how to work together while your restaurant is temporarily closed. If you are renting a space for your small business, you are paying rent to the landlord of that space. This is another person to speak with in terms of how flexible they may be on taking rent late, etc.
3. Avoid Predatory Lending
“Please avoid going into predatory lending market on commercial lending, we’re seeing rates as high as 90%. There’s no way to get out of those programs. It will be a death sentence for your business.”
At this time in the economy, there are many changes occurring almost daily. This can be a trigger for a small business owner to jump on any lending program, without enough information on those loans. Predatory lenders want to capitalize on this time by creating a loan with unfair terms through exploitative practices. Before jumping into a predatory loan, please contact Meda to discuss your other options.
Three Programs to Obtain Capital for your Small Business
1. Paycheck Protect Program– U.S. Small Business Administration (SBA)
The SBA is an independent agency of the federal government. Its goals are to aid small businesses in any concerns that may come up and to maintain the free competitive enterprise of small businesses.
- restricted to payroll to keep your employees working
- No personal guarantee
- Not taking collateral
2.Economic Injury Disaster Loan (EDIL) Loan Program
This program also comes from the SBA. This loan is an advance that has the goal to provide relief for businesses that are going through a temporary loss of revenue. Capital to be put towards maintaining payroll, providing paid sick leave for your employees, meeting increased costs, making rent or mortgage payments, or paying any other unmet obligations.
- Short form application can finish in 30 minutes
- SBA will calculate the amount of funding and terms for you
- 5% rate, 11-month deferral.
- Personal guarantee
- Taking collateral
- Directly funded by SBA
- Loan advance up to $10,000 (not needed to payback)
3. Department of Employment and Economic (DEED) Emergency Lending Program.
This program also comes from the SBA and businesses must apply through a certified lender. Businesses that qualify are listed in Executive Orders 20-04 and 20-08 by Gov. Tim Walz of Minnesota. All qualifications must be met.
- For “a business that was mandated to shut down”
- Your company must meet eligibility requirements, i.e. restaurants, bars, and social gathering events that were forced to close
- Apply directly through a certified lender and get into the cue
- A forgivable loan on 50% of the debt
- 0% interest
- Loan limits from $2,500 to $35,000
- Paid back over 5 years, deferred for 6 months
- Non-profits are not eligible
- 1st round of funding starting now – for DEED
Contact Patrick with any additional questions: firstname.lastname@example.org
- To watch the Patrick’s Facebook Live: click here
- Check out our Facebook Page: https://www.facebook.com/MedaMinnesota/