In today’s special segment, we’re pleased to welcome back Mr. Ashley Bell, who is the White House Policy Advisor on entrepreneurship and innovation. Ashley also serves as Regional Administrator for SBA Region IV, and today he discusses the federal and state resources that small businesses can utilize to find economic relief from COVID-19 aka the Coronavirus.
Update: The U.S. Small Business Administration has approved Georgia’s application for disaster relief loans! You can now apply for a loan here: https://disasterloan.sba.gov/ela/
Jim Fitzpatrick: Thank you so much for joining us today Ashley.
Ashley Bell: Thank you for having me. This is such a great opportunity to speak with small business owners, always appreciative of you doing these shows.
Jim Fitzpatrick: Great, great. Well, we appreciate those comments. You must be a very busy young man these days with the coronavirus and small businesses wondering what’s next and not just what’s next in the virus but also more importantly to them what’s next in their businesses, right?
Ashley Bell: Absolutely. And it’s just great for us to be on a show like yours being able to share with people what resources the small business administration has at their disposal and what we’re working on to make sure that they can keep their doors open and keep their employees on payroll and can see how they can continue to operate in these trying times.
Jim Fitzpatrick: Sure. Well, let’s jump right in. As of today, Georgia was not one of the States that was I guess deemed a state ready for the special funds that were set aside for the coronavirus situation and we’ve gotten a lot of emails on that and people that have reached out to us on social media and such. Where does that stand now? A, why is that the case and then B when will that change?
Ashley Bell: The governor’s team has been working very hard on this. And I’ll tell you the challenge was this disaster program is set up primarily for hurricanes and tornadoes. So, usually, a governor will submit an application with several counties on that list that have been hit but every county in Georgia has been hit. So you have 159 counties that we have to gather data from. And so, the governor has signed that application and it is in DC and we should expect a declaration in the next 24 to 48 hours.
Jim Fitzpatrick: Oh, that’s great. And then once that Georgia is added to the list then it would open up the funds to be available to start, small businesses can then start applying for those funds for their businesses?
Ashley Bell: Absolutely. We worked around the clock with the governor’s office to make sure that application’s in, that the declaration will come very soon and the moment that happens you will see Georgia’s name, Georgia listed on sba.gov/disaster and at that time small businesses will be able to take advantage of the emergency disaster assistance.
Jim Fitzpatrick: Okay, great. Typically SBA loans take anywhere from six to eight weeks to complete, has that time been shortened under these circumstances?
Ashley Bell: Well, these are completely different types of loans and one in particular difference is that this is the only time SBA is actually the lender so there’s no third party here, there’s no middle person. If go out and get a normal SBA loan like you and I have talked about before you go to your traditional lender but here we are lending the money so it cuts out a lot of the paperwork. There’s nowhere to send it, we all do it in house and so you can get money in as little as seven days.
Jim Fitzpatrick: Really as little as seven days? That’s fantastic news for small business owners because as you know if they’ve got to shut their bar or they’ve got to shut their restaurant or movie theater or whatever the case might be it really stops that revenue coming in which hurts them in a very big way, right?
Ashley Bell: Absolutely. And that’s what we want to avoid. So as soon as you see, if you’re a small business owner, you see this if your doors aren’t opening as much and you see fewer customers and you understand that this is directly related to the virus you can think about applying for this loan. And what this loan is meant to do is cover payroll, cover your mortgage for your building if you own it, any of your expenses. And you can project them out meaning that you can look and say, “Look, I’m losing money at this rate right now and I’m going to lose it for the next six to eight months.” And we can get you assistance at those projected losses to make sure that you’re covered.
Jim Fitzpatrick: Oh, wow. That’s a pretty aggressive plan, six to eight months.
Ashley Bell: Yeah. So any loan under $25,000 you won’t have to have a conversation about collateral if it’s over $25,000 we need to have a conversation about collateral. But it doesn’t necessarily mean you have to have exact collateral it just shows that you can pay it back. And the great thing about this is whatever your loan amount is on a case by case basis we can stretch that loan repayment out up to 30 years.
Jim Fitzpatrick: Wow, that’s incredible. And it’s also a pretty low rate, right?
Ashley Bell: Right, exactly. It’s 3.75 for private businesses. But here’s the key, because this is a special disaster this is one of the few times SBA will actually lend money to nonprofits as well. So there’s a nonprofit rate of 2.75. And the type of nonprofits we’re talking about are not necessarily religious but your Boys and Girls Club for example, places that service our community, private nonprofits, they’re eligible.
Jim Fitzpatrick: Sure. What are some of the parameters on a loan like this? Could it be somebody that is in business with one person working out of their home but their business has been pretty much put on hold because of the virus?
Ashley Bell: Anyone that can show a tax return for their particular business is eligible, they’re a small business. And if they’re able to show that they’ve had losses which means that you at least have your books in order enough to be able to say, “This time last year this is what I was making,” or, “This time last month this is what I was making.” And no matter what, and it may not necessarily have to be directly related to what’s going on right now. If you’re in Atlanta and you know your business was going to do well because of the Final Four and the Final Four might not be coming then you know that those projections are not going to be what you thought they were going to be, that’s also a way that you can claim
Jim Fitzpatrick: When you mentioned you all we have to do, all this small business owner has to do is show that they’ve got a way to pay back the loan doesn’t that go against the fact that if the business is running in the negative that’s why they need the loan? I mean is it a situation where you may say, “Hey, you’re running in the red here it doesn’t look like you can afford to pay the loan back.” How do you guys look at that?
Ashley Bell: That’s a great question. One of the criteria is that you have to be able to show that you cannot get credit elsewhere. The question you just brought up is what any normal banker would ask in these situations but that’s why SBA is the banker in this particular instance. We’re looking at could you pay it back after you’re back to full strength. So we understand that right now you don’t have that income and we’re going to give you the income to hold you over until you’re back. But we just need to see the once things are back and rolling that in your normal course of business, at your normal strength that you would be able to repay this loan.
Jim Fitzpatrick: Okay, that’s great. And when you mentioned the little bit larger loans that that you may look at the individual’s assets and what have you what is it you’re talking about, real estate, maybe some equity in their home or things like that?
Ashley Bell: Well, the maximum amount of this loan is $2 million. So you can get up to a $2 million loan. If you are over $25,000 There needs to be a conversation about collateral. So it could be anything that your business has as an asset. So it’s not required but we just need to know that there’s some collateral out there but it’s not a requirement that you have.
Jim Fitzpatrick: Okay. Gotcha. Gotcha. And then you said how fast to get an approval on something like this versus getting the funds themselves?
Ashley Bell: Well, I think a lot of that depends on how much you’re asking for. Obviously below the $25,000 threshold does not require collateral so that’s a little easier process. I think the bigger the number the more we’ll need to have a clear understanding of how the loan is getting repaid. But I believe that by doing this all online it streamlines it. There’s no middle person, there’s no bank that you have to go through to get to us, it is directly working with SBA. And our disaster team has been doing this at a top notch level during major crisis throughout this country but this one’s different this is not one county, this is not one region, this is the entire nation. So we ask folks to understand that you’re going to go quicker if you get your paperwork together ahead of time. You can go online now and see what paperwork’s required. The more prepared you are the more prepared you’ll be to to expedite the process when it’s that time.
Jim Fitzpatrick: Okay. And how do you define small businesses? What are the parameters that would make you eligible or ineligible for this kind of a loan program?
Ashley Bell: Well, there’s no hard steady line. Small business by SBA is determined off of your industry. So, many times it’s going to be determined by the type of business that you have. If you’re a manufacturer obviously we declare manufacturers of small businesses under 1,500 people. If you’re in real estate we declare that someone who own average doesn’t make more than $36 million a year if you’re in construction. So it just depends on what you do and we can have that conversation with any business owner about what would qualify them as a small business.
Jim Fitzpatrick: Okay. And it sounds like no business is too small, if they have a tax return then they pretty much qualify to be in the program.
Ashley Bell: Absolutely.
Jim Fitzpatrick: Yeah. What other guidelines or what other tips would you have for small business owners as it relates to this?
Ashley Bell: Well, I think just to be thoughtful. You don’t want to take out more than you can pay back but you do want to be thoughtful about making sure that the money that you’re going to receive can keep your doors open. Obviously we would like people to consider keeping everyone on payroll if they can. If you have employees that also have families that need to be employed during this time it’d be great that this loan could go to make sure they’re still employed in some form or fashion. So just to be thoughtful about your employees. We want to make sure that we get through this together and keeping people employed is the best way to make sure we can recover quicker and stronger then ever before.
Jim Fitzpatrick: Yeah, that’s for sure. Has there been another time in history that the SBA has committed so many dollars to a program like this directly?
Ashley Bell: There has never been anything like this. This challenge is like nothing we’ve ever seen before. But this challenge is the same for every business, it’s the same for every family, it’s the same for this agency. It is new rules and this is a large undertaking but we’re going to handle it the same way every family in business does one day at a time and looking at on a case by case basis what decisions we need to make to get America’s businesses back working again.
Jim Fitzpatrick: Yeah, that’s great. And what a great thing for small businesses to have to be able to lean back on the SBA has been there for so many small businesses, thousands if not millions over the years to either get started or grow their businesses or build their buildings. And so, without a doubt for those that are listening this certainly is a way to stay in business during these tough times and do it the most intelligent way and at a low rate, phenomenal terms and it sounds like an extremely quick turnaround which is exactly what small business owners need at a time like this, right?
Ashley Bell: Absolutely.
Jim Fitzpatrick: Yeah, for sure. Well, Ashley Bell I want to thank you so much for joining us here on the Atlanta Small Business Show. It is always a pleasure. You guys are fighting the good fight in DC and here in Atlanta and we appreciate it very, very much.
Ashley Bell: Well look, please join us at sba.gov/disaster. That’s where you can get up to date information on how to keep your small business healthy and strong and make sure you have access to the resources that we have for all small business owners. Thank you again for giving me this opportunity and I look forward to being with you again soon as more developments happen.
Jim Fitzpatrick: That would be great. We’ll show all the information here on our website and we’ll show the link right underneath this video on our homepage. So thanks again Ashley I appreciate it. Stay well.
Ashley Bell: Thank you. You too.
Jim Fitzpatrick: Take care.
Thanks for watching Atlanta Small Business Show with Jim Fitzpatrick. This has been a JBF Business Media production.
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