Have You Exhausted All Economic Assistance Available to You ?
By the time this article is published , we will have
endured the COVID-19 pandemic for the better part of nine months . Some locations may still be closed as a result , but most have re-opened and are operational . From what I hear from operators throughout the United States , numbers are stronger than expected , but certainly there is work to be done to get back to pre-COVID success levels . Perhaps during this time you took advantage of some of the financial support that was available to business owners in various forms , from loans to grants . More critically , are you aware of which programs are out there and how they can help you rebound as quickly as possible as the economy strengthens and re-opens ?
Unlike the financial crisis of 2008 , for those who endured it , one notable difference for businesses during the COVID-19 outbreak was the influx of financial aid from federal , state and local governments . Most , if not all , operators are aware of the Paycheck Protection Program ( PPP ). Indeed , many operators took advantage of this program , which provided a 100 % forgivable loan to assist business owners with payroll obligations , rent , and other forms of needed relief over a set period . Moreover , many operators also had at their disposal the Economic Injury Disaster Loan ( EIDL ), which is also a forgivable loan program to provide relief to businesses experiencing a temporary loss of revenue due to COVID-19 . Both the PPP and the EIDL programs were set forth , provided for , and administered by the federal government .
Notably , one of the more underutilized programs available to , and likely appropriate for gym owners and other retail businesses , is the Main Street by Justin M . Klein Lending Program ( MSLP ). The MSLP is geared toward lending to small- and medium-sized for-profit businesses and nonprofit organizations that were in sound financial condition before the COVID-19 pandemic , but lack access to credit on what the government called “ reasonable terms .” To allow borrowers time to recover from the pandemic , the program offers several five-year loan options with deferred principal and interest payments for qualified businesses and nonprofits . It is unclear why this program was not more sought after by business owners .
One theory is that banks were not keen on supporting the MSLP . As the theory goes , lenders may have been averse to lending to applicants who otherwise could not get “ reasonable ” credit terms due to the lenders ’ perceived risk that many businesses might not withstand the harm caused by the pandemic . Since the program went operational in July , fewer than 400 loans have been made for a total of $ 3.7 billion , a fraction of the total $ 600 billion potentially available .
2020 Issue 4 | GearedUp
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