As a community-based business bank, Mission Valley is committed to supporting clients, staff and community. Now on the financial frontlines of the COVID-19 pandemic, the bank is focused on helping clients through the economic challenges of the situation.
With the recent passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act, emergency financing options have broadened to include the SBA Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP). These two programs can dramatically help businesses manage day-to-day expenses through the worst of the crisis.
Economic Injury Disaster Loans (EIDL)
As explained on the Small Business Administration website, “In response to the Coronavirus (COVID-19) pandemic, small business owners are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing … this loan advance will not have to be repaid.” Small business owners interested in the EIDL program apply directly at SBA.gov.
Paycheck Protection Program (PPP)
Created to provide a way for small businesses to keep their employees on the payroll, the Paycheck Protection Program is for any small business with less than 500 employees affected by the pandemic, including sole proprietorships, independent contractors and self-employed persons, and qualifying private non-profit organizations.
The SBA has stated that loan amounts will be forgiven as long as the loan proceeds are used to cover approved expenses — payroll costs, most mortgage interest, rent and utility costs – over the eight-week period after the loan is made. Other restrictions may apply. Funds not forgiven will be termed out over the two-year loan at an interest rate of 1% (as of April 13). The program will be available through June 30. Unlike the EIDL program, borrowers apply for PPP loans through an existing SBA 7(a) lender or other participating federally insured depository institution.
If you are interested in securing a PPP Loan, the best advice is to contact your current bank for assistance.
Mission Valley Bank is a locally owned, full-service community business bank headquartered in Sun Valley, California with a branch office/business banking center in Santa Clarita. Tamara Gurney is past president of the California Independent Bankers, and can be reached at (818) 394-2300. www.MissionValleyBank.com.