Explore COVID-19 relief programs for small businesses with Protect Law Group. Discover how PPP and EIDL can support your recovery—get help today!
Book a Consultation CallThe COVID-19 pandemic has profoundly impacted small businesses across the nation, leading to unprecedented challenges and financial hardships. To combat these issues, the federal government introduced various relief programs aimed at providing financial assistance to eligible businesses.
Protect Law Group will delve into key SBA programs related to pandemic relief, focusing on the Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL). By understanding these business debt relief resources, small business owners can navigate recovery more effectively.
As of late 2023, various updates and adjustments have been made to both PPP and EIDL programs to reflect the evolving landscape of economic recovery. Small business owners should stay informed about any new guidelines or extensions offered by the SBA, as these can significantly impact their ability to access business debt relief.
The Paycheck Protection Program (PPP) was designed to help small businesses maintain their workforce during the COVID-19 crisis. By offering forgivable loans to cover payroll expenses, the program aimed to ensure employees remained on the job. Businesses could apply for loans amounting to 2.5 times their average monthly payroll costs, which significantly aided companies struggling to pay their staff during lockdowns and reduced operations. SBA loan lawyers were able to make a profound difference for their clients.
Eligibility for PPP loans was broad, but specific criteria had to be met. Small businesses with fewer than 500 employees, self-employed individuals, and certain non-profits were eligible to apply. It's essential to note that applicants needed to demonstrate that the pandemic negatively affected their business operations, reinforcing the loan's intended purpose of providing much-needed support during tough times.
One of the standout features of PPP loans was their potential for forgiveness. To have their loans forgiven, businesses needed to use at least 60% of funds for payroll costs, while the remaining 40% could cover rent, utilities, and mortgage interest. By following proper procedures and maintaining employee retention, businesses could effectively turn their loans into grants, greatly alleviating financial burdens.
In addition to PPP loans, the Economic Injury Disaster Loan (EIDL) program served as another crucial resource for small business debt relief during the pandemic. EIDLs were designed to provide working capital to cover operational expenses and help businesses regain their financial footing. These low-interest loans became vital for businesses struggling to meet their financial obligations due to pandemic-related disruptions.
To qualify for EIDLs, businesses had to demonstrate substantial economic injury caused by the pandemic, which could include reduced revenue and increased expenses. The application process required businesses to provide essential financial information, including profit and loss statements. As a result, understanding the necessary documentation upfront helped expedite the application process. SBA loan lawyers can help businesses navigate this paperwork.
By leveraging these resources, business owners can better navigate recovery and adapt to a post-pandemic world. Staying informed about current business debt relief is crucial for long-term success, and small business owners should continue to explore their options as they seek to regain stability and growth. Contact Protect Law Group for more detailed information and guidance.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Clients obtained an SBA 7(a) loan for $324,000 to buy a small business and its facility. The business and real estate had an appraisal value of $318,000 at the time of purchase. The business ultimately failed but the participating lender abandoned the business equipment and real estate collateral even though it had valid security liens. As a result, the lender recouped nearly nothing from the pledged collateral, leaving the business owners liable for the deficiency balance. The SBA paid the lender the 7(a) guaranty money and was assigned ownership of the debt, including the right to collect. However, the clients never received the SBA Official 60-Day Notice and were denied the opportunity to negotiate an Offer in Compromise (OIC) or a Workout directly with the SBA before being transferred to Treasury's Bureau of Fiscal Service, which added an additional $80,000 in collection fees. Treasury garnished and offset the clients' wages, federal salary and social security benefits. When the clients tried to negotiate with Treasury by themselves, they were offered an unaffordable repayment plan which would have caused severe financial hardship. Clients subsequently hired the Firm to litigate an Appeals Petition before the SBA Office & Hearings Appeals (OHA) challenging the legal enforceability and amount of the debt. The Firm successfully negotiated a term OIC that was approved by the SBA Office of General Counsel, saving the clients approximately $205,000.
Client personally guaranteed SBA 7(a) loan balance of over $150,000. Business failed and eventually shut down. SBA then pursued client for the balance. We intervened and was able to present an SBA OIC that was accepted for $30,000.
Small business sole proprietor obtained an SBA COVID-EIDL loan for $500,000. Client defaulted causing SBA to charge-off the loan, accelerate the balance and refer the debt to Treasury's Bureau of Fiscal Service for aggressive collection. Treasury added $180,000 in collection fees totaling $680,000+. Client tried to negotiate with Treasury but was only offered a 3-year or 10-year repayment plan. Client hired the Firm to represent before the SBA, Treasury and a Private Collection Agency. After securing government records through discovery and reviewing them, we filed an Appeals Petition with the SBA Office of Hearings & Appeals (OHA) court challenging the SBA's referral of the debt to Treasury citing a host of purported violations. The Firm was able to negotiate a reinstatement and recall of the loan back to the SBA, participation in the Hardship Accommodation Plan, termination of Treasury's enforced collection and removal of the statutory collection fees.
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