An Inside Look: Can I Get Small Business Relief? Part 1

As a member service, OAAA is following an out of home company through the application process to access federal stimulus money. The purpose is to share information. For the sake of unvarnished narrative, we are withholding names of the applicant and lender.

President Trump signed a massive stimulus bill Friday, March 27, including $349 billion for small business loans.

On Monday, March 30, OAAA checked in with this company and others, to gauge interest in small business relief.

Do you intend to apply for small business stimulus relief?

No, the OOH company said, preferring to avoid debt and intending to shoulder the crisis without government money.

By Tuesday, March 31, the OOH company changed its mind, facing sales cancellations, reductions, campaign postponements, and late payments.

Why did the OOH company change its mind?

Because it learned that loans from the Small Business Administration (SBA) would be forgiven if the stimulus money is used to keep people working and paid.

The word “FORGIVEN” was spelled out in all caps an internal company email sent 4:15 pm on Monday, March 30.

Plus, this new government program didn’t seem like a bureaucratic maze. “This is not the same playbook (as a previous small business loan program) with its 427-page standard operating procedure,” said the OOH company’s banker that night at 10:20 p.m.

Besides avoidance of debt and government strings attached, were there other reasons to hesitate?

Yeah. The OOH company execs did not view themselves as experts; they are not lawyers or mortgage lenders. They thought applying for government assistance was outside their wheelhouse.  Additionally, the typical loan process is laborious, and requires a considerable amount of personal income and tax information, in addition to personal guaranty and exposure on behalf of ownership.  That is not the case with this particular loan program.

Basic Question: 
Is your bank handling small-business stimulus money?

The OOH company couldn’t find its bank via online lists. The OOH company contacted its bank directly, learning that — yes — it is an approved SBA lender.

What has the OOH company done so far?

The company principal (president) completed an online form (on Tuesday, March 31), essentially a sign- here-if-you-are-interested link. The President also had a phone conversation with their commercial lender, to make sure that he understood the eligibility requirements and what would be considered “forgivable” expenses, under this program. The OOH company expects to receive an application when they’re ready.

Why aren’t applications ready now?

Because lenders are waiting for guidance from the feds; they expect to get guidance this week.

What has the OOH company learned up to this point?

  • Small business stimulus loans do NOT require collateral or personal guaranty
  • The standard is “good faith.” The OOH company will be asked to certify that:
  • Uncertainty caused by the pandemic means that relief is necessary to support ongoing operations
  • The money will be used to retain workers, maintain payroll, and-or pay mortgage, lease, or utility expenses
  • The company isn’t getting duplicative loan money
  • Applicants can receive up to 2.5 times average monthly payroll
  • Loans will be forgiven if the money is used to keep workers on the payroll or bring them back within certain time frames

Bottom line:
“It seems like a no-brainer to apply for this SBA paycheck protection loan,” said the OOH company leader.

Next: Lenders will get guidance from the feds. Affected companies will get applications. OAAA will give you an inside look.