WICHITA FALLS (KFDX/KJTL) — Small businesses are one of the most vulnerable entities during any disaster. But with the CARES Act signed into law on March 27, these businesses can soon see some much-needed government assistance.
With the CARES Act bringing relief, small businesses have a lot of questions about if they qualify and what the money can be used for. That’s why the Small Business Development Center is here at MSU to answer their questions.
With shelter in place ordinances being put in place across the country, non-essential businesses have to close their doors; and that does nothing but hurt the economy.
“Now if you look at the local economy, we produce on a yearly annual basis about 6.4 billion dollars per year,” MSU professor of economics Dr. John Martinez said. “On a quarterly basis that would be 1.6 billion. So if we take the same proportionate hit, a fourth of 1.6 billion is 400 million. So 400 million is the kind of hole that we believe that we’re gonna have to try. That we’re gonna probably suffer.”
And to try to prevent that hole, small businesses can now apply for government loans as part of the new CARES stimulus package.
“Well right now it’s the economic injury disaster loan and the payroll protection plan through the CARES Act,” SBDC at MSU Texas regional director Vanda Cullar said.
The payroll protection plan will be based on payroll and payroll expenses while the economic injury disaster loan can be used for working capital for about 6 months of operating expenses.
But the EIDL has a grant as well.
“For this emergency advance, and again that’s the grant portion. So you can receive the grant portion and you do not have to accept the loan if you decide that you do not want that,” Cullar said.
But for some businesses, especially those in food service and hospitality, a government loan may not be enough.
“While all of the funds that are coming from the federal government will help, I just think that it’s not gonna be enough to rescue so many of these small businesses. And there the ones i’m really worried about,” Dr. Martinez said.
For now, the SBDC has some advice for business owners.
“Talk to your local lender. Consider applying for the economic injury disaster loan. You may apply for both: the EIDL and the payroll protection program,” Cullar said.
Business owners are encouraged to like SBDC’s Facebook page and join their email list to stay up to date on any more government business information.
The SBDC is also hosting a webinar for small businesses to learn about the EIDL, the PPP and other forgivable government loans.