Congress could extend small business loan forgiveness timeline to 12 weeks, Mnuchin says

Mnuchin: CARES Act has poured $3T into economy

Treasury Secretary Steven Mnuchin highlights the Main Street Lending Program and the overall impact the CARES Act has had on small businesses throughout the United States.

Get all the latest news on coronavirus and more delivered daily to your inbox.  Sign up here.

Continue Reading Below

Lawmakers could extend the time frame for small businesses to spend the coronavirus aid they received through the $660 billion Paycheck Protection Program, Treasury Secretary Steven Mnuchin said Thursday.

"One of the things we are working with Congress on, and there is bipartisan support, is lengthening the eight-week period," Mnuchin said during an interview with The Hill. "There is bipartisan support to extend that to 10 or 12 weeks … That's definitely something we want to fix."

MARK CUBAN CALLS FOR DEPRESSION-ERA FEDERAL JOBS PROGRAM TO REVIVE US ECONOMY

Mnuchin acknowledged that some restaurant groups have asked for the timeframe to be extended to 24 weeks.

The Senate is considering legislation that would double the amount of time businesses have to spend the money to 16 weeks, and House Democrats are expected to bring a similar bill to the floor next week.

In a video posted to Twitter this week, Sen. Marco Rubio, chairman of the Senate Small Business Committee, said Senate Republicans are trying to pass a stand-alone bill to extend the PPP loan. The Florida Republican said he expected the bill to receive "99 or 98 votes."

DESPITE PPP LOANS, SOME SMALL BUSINESSES ARE CHOOSING TO STAY CLOSED – HERE'S WHY

“We are going to change PPP so that if you got a PPP loan, you have 12 or 14 or 16 weeks to spend the money on payroll,” Rubio said. “Still the same purpose, just some more flexibility because the crisis has changed.”

Under the current rules, recipients of the government-backed aid must spend the money within eight weeks, meaning small business owners who received the earliest loans must spend the funds by May 29.

If at least 75 percent of the money goes toward maintaining payroll — including salary, health insurance, leave and severance pay — the federal government will forgive it.

WILL YOU GET A SECOND STIMULUS CHECK? HERE'S WHAT WE KNOW

The remaining 25 percent can be spent on operating costs like rent and utilities, but may not go toward mortgage principal or pre-payments. Money spent on nonqualifying expenses must be repaid at an annual rate of 1 percent within two years. No payments are required during the first six months.

Although some advocacy groups have pushed for the 75 percent requirement to either be changed or eliminated entirely, arguing that it could hurt tens of thousands of borrowers who cannot meet the threshold, Mnuchin defended the restriction.

"It's called the Paycheck Protection Program, it's not called the overhead protection program," he said.

As of Monday night, about 4.3 million loans worth more than $513 billion had been distributed, leaving roughly $97 billion left in the pot.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article

Americans support small businesses during coronavirus with online classes, takeout

How coronavirus reopenings could impact swing states

FOX Business’ Jackie DeAngelis on how small businesses in swing states are faring and how that could impact the November presidential election.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

Americans are looking forward to supporting local businesses as they reopen and coronavirus restrictions ease up, according to a new survey.

On Tuesday, Groupon released the results of a survey conducted by OnePoll.

Of the 2,000 people surveyed, 75 percent of respondents said they “plan to support local merchants as much as possible once restrictions on non-essential businesses are lifted in their communities,” a press release about the survey said.

In fact, about 86 percent said they supported a local business during quarantine, the survey found.

CARES ACT EXPANDS SMALL BUSINESS ACCESS TO LESS EXPENSIVE, QUICKER BANKRUPTCY OPTION

About 77 percent of respondents said they took an online class or joined a virtual experience by a local business, 65 percent said they booked summer activities that are close to home to keep their children entertained and 60 percent said they ordered more takeout and delivery from local restaurants.

Overall, the survey found that 57 percent of respondents know of at least one business affected by coronavirus regulations.

DESPITE PPP AID, SOME SMALL BUSINESSES ARE CHOOSING TO STAY CLOSED – HERE’S WHY

“This crisis has disproportionately affected small businesses and our hearts go out to local merchants, who have often poured their life savings into their businesses,” Simon Goodall, Groupon’s chief commercial officer. said in a statement. “As some businesses begin to slowly and responsibly open back up, it’s encouraging to see that many Americans plan to continue to help their communities recover by supporting small, local businesses.”

“Even if you live in an area that hasn’t relaxed restrictions or you don’t feel that it’s safe to support them in person just yet, there are still a number of meaningful ways that you can make a huge difference right now such as taking an online class, ordering takeout or delivery and booking future plans,” Goodall added.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Despite the difficulties small businesses have experienced, the Groupon survey also found that 67 percent of respondents are more hopeful now than they were when the pandemic started.

Once it’s safe, Americans are expected to start spending their money first at restaurants, retailers, clothing stores, salons, spas and bars, according to the survey.

Ticker Security Last Change Change %
GRPN GROUPON INC. 1.21 -0.01 -1.23%

In fact, the average American plans to spend about $100 a week on local businesses after coronavirus restrictions are lifted in order to help the economy, the survey found. That’s up 16 percent from before the pandemic, according to Groupon.

CLICK HERE TO READ MORE ON FOX BUSINESS

Source: Read Full Article

CARES Act expands small business access to less expensive, quicker bankruptcy option

J.C. Penney files for bankruptcy; Kroger says ‘thank you’ to its employees

Fox Business Briefs: Coronavirus pushes another retailer over the edge as J.C. Penney files for bankruptcy; Kroger is giving $130 million to its employees to say thank you for working during the pandemic.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

As the coronavirus pandemic weighs on businesses around the U.S., a new bankruptcy option that was expanded under the CARES Act may be able to help some small businesses navigate the crisis.

Companies around the country have felt pressure from lockdown measures and forced store closures, which has led to an uptick in overall bankruptcy filings, Joe Pack, attorney at Pack Law, told FOX Business.

“Sort of like the pandemic, there’s really no discrimination,” Pack said. “Whether the companies are sexy or not, are large or not … it’s affecting all of them.”

SBA RELEASES CORONAVIRUS PPP LOAN FORGIVENESS APPLICATION

The good news for small businesses is that there is a less expensive, quicker process they can choose as opposed to filing for traditional Chapter 11 protection.

The Small Business Reorganization Act, which took effect in February, added a feature to the bankruptcy code known as subchapter V. The provision applied to small businesses with debt amounts up to $2.725 million.

The CARES Act upped the debt threshold to $7.5 million, making the option more widely available to small businesses.

J.C. PENNEY TO PERMANENTLY CLOSE ABOUT 242 STORES AS PART OF BANKRUPTCY PLAN

WHAT IS SUBCHAPTER V?

It is a streamlined, less expensive and more accessible bankruptcy process that allows small businesses to restructure without ceding control of operations.

Under subchapter V, only a debtor can file a plan, which must be done within 90 days of filing for bankruptcy. There is no committee of unsecured creditors who need to approve the plan. Instead, the plan is expected to be approved so long as the debtor allocates discretionary income toward plan payments over the course of three to five years. The owner also does not have to pay creditors in full in order to retain control.

“A lot of people that explore Chapter 11 appreciate how expensive it is,” Pack said, who noted that subchapter V allows small businesses to “get in and out quickly.”

The broadened threshold is set to expire next year.

In terms of popularity, businesses are still adjusting to the idea of subchapter V, Pack said.

CLICK HERE TO READ MORE ON FOX BUSINESS

He added that it doesn’t hurt for a company to explore the option of filing for bankruptcy protection, as a way to learn what options are available. It doesn’t have to mean that you are going out of business or that you are going to file.

Recently, a number of major retailers have filed for bankruptcy, including J.C. Penney, Neiman Marcus and J. Crew.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article

Banks setting up for small business loan forgiveness as government prepares to release roadmap

2.98M Americans applied for unemployment last week

FOX Business’ Cheryl Casone breaks down the latest jobless claims numbers, which came in higher than expected at 2.98 million.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

Banks are starting to lay the groundwork for Paycheck Protection Program loan forgiveness as the Treasury Department and Small Business Administration prepare to unveil guidelines for the millions of borrowers who hope to turn their federally backed coronavirus aid into a grant.

“I think we’ll have the application and the guidelines as early as today,” Sen. Marco Rubio, the chairman of the Senate Small Business Committee, told ABC News Wednesday night.

PPP RECIPIENTS COULD FACE LOAN CHALLENGES – HERE'S WHY

Under the program, which Congress established as part of the $2.2 trillion CARES Act, businesses with fewer than 500 workers can secure low-interest loans of up to $10 million. If at least 75 percent of the money goes toward maintaining payroll — including salary, health insurance, leave and severance pay — within eight weeks, the federal government will forgive it.

The remaining 25 percent can be spent on operating costs like rent and utilities, but may not go toward mortgage principal or pre-payments. Money spent on non-qualifying expenses must be repaid at an annual rate of 1 percent within two years. No payments are required during the first six months.

“Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels,” the Small Business Administration said on its website. “Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”

ELITE SCHOOLS THAT TAPPED SMALL BUSINESS FUND SHOULD RETURN AID, MNUCHIN SAYS

But small business owners have cited confusion and uncertainty around the forgiveness process. Owners who received the first PPP loans are nearing the end of that eight-week period.

Plus, with the expanded unemployment benefits included in the economic-relief bill, it’s become more lucrative for some workers to remain unemployed than to return to their job. The ensuing problem means that borrowers could be saddled with huge debt loads if they’re unable to spend the money as dictated for it to become a grant. Only a handful of states have allowed businesses to reopen.

Rubio said Wednesday that he and Sen. Ben Cardin, a Maryland Democrat who also sits on the Senate Small Business Committee, intend to craft a bill to extend the eight-week period, though neither specified what the change will be.

TREASURY SAYS SOME PUBLIC COMPANIES NOT ELIGIBLE FOR SMALL-BUSINESS LOANS AFTER BACKLASH

ADP, a payroll processing firm, released a checklist for small businesses hoping to have their loan forgiven. It includes:


  • Maintain staffing levels: The average number of full-time employees per month during the eight-week period should be “at least equal” to the average number of full-time employees between Feb. 15 and June 30, or January through February of 2020.

  • Reverse any reductions in staffing levels by June 30: The forgiveness amount may be reduced if a small business owner reduced staff levels or payments outside of the Feb. 15 – April 26 timeline. It’s unclear whether the forgiveness amount will be reduced if the staffing reduction is reversed by June 30. 

  • Maintain pay levels: Avoid reducing any employee’s wages by 25 percent or more during the eight-week period that you receive the loan. If you lower an employee’s wages, the loan may still be forgiven if you reverse it by June 30. 

  • Only use the PPP money for permitted uses: Payroll costs, health-care costs; family leave; interest on mortgage obligations; rent and utilities.

  • Spend the loans within eight weeks of loan receipt 

  • Use at least 75 percent on payroll costs during the eight weeks after loan receipt 

For instance, if a small business owner received a $100,000 loan, and over the course of eight weeks, used $60,000 of it on payroll costs and $30,000 on non-payroll costs, only $25,000 of the non-payroll costs would be forgiven. That would leave the small business owner with $15,000 to repay, plus interest.

Source: Read Full Article

Small business loan program still hindered by glitches in second day of relaunch

Second round of small business loan applications opens

FOX Business’ Edward Lawrence says the second round was off to a great start for bigger banks, but smaller banks were not able to connect to the system.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

Early on the second day of the reopened Paycheck Protection Program, a government-backed lifeline to help small businesses survive the coronavirus pandemic, bankers reported the online portal for submitting applications was still hampered by technical glitches.

Congress injected the loan program, an integral part of the federal government's massive economic stimulus effort, with an additional $310 billion for small businesses last week.

But "E-Tran,” the SBA’s electronic loan guarantee system, has been beset by technical errors and access issues since the second wave of funding for the low-interest loan program launched Monday. Although small businesses apply for the aid through banks, the SBA guarantees those loans and must authorize each one via "E-Tran.”

According to Richard Hunt, the CEO and president of Consumer Banks, banks worked overnight to help small businesses, processing on average 45 loans per hour, compared to the expected rate of 350 per hour.

“At this rate,” he wrote on Twitter, “we’d be at it for 51 days.”

LUXURY HOTEL OWNER IS BIGGEST BENEFICIARY OF CORONAVIRUS SMALL BUSINESS PROGRAM WITH NEARLY $60M IN AID

Maria Amoruso, chief marketing officer at NexTier Bank, wrote on Twitter early Tuesday morning that she had been trying unsuccessfully to access E-Tran since it opened at 10:30 a.m. ET on Monday. In the 18 hours that she has tried to submit applications, Amoruso said she’s only managed to get five loans approved.

“I have not had a connection for longer than a couple minutes,” she said. “This is not the result of pacing. This is the result of a system that isn’t working.”

Some banks have thousands of applications to process for increasingly desperate customers trying to save their businesses. The design of the program adds to the urgency: Businesses are supposed to receive the forgivable loans on a first-come, first-serve basis.

By 3:30 p.m. ET, the SBA said it had processed about 100,000 loans submitted by 4,000 lenders. The agency acknowledged tech issues with the website, saying that “unprecedented demand” had slowed the system’s response times. Twice as many people tried to access the program Monday, compared to any period during the initial funding phase, according to SBA Administrator Jovita Carranza.

The program exhausted its initial $349 billion in funding within 13 days and was heavily criticized for granting multimillion-dollar loans to big, publicly traded companies — even as small businesses languished financially.

CORONAVIRUS SMALL BUSINESS BILL STILL INCLUDES LOOPHOLE FOR BIG COMPANIES

TD Bank CEO Greg Braca told FOX Business the bank has at least 26,000 applications in the queue for the second wave of aid.

“We’re very much focused on getting through the second round,” he said.

More than 26 million Americans, or about 16 percent of the nation, have filed unemployment claims since the virus outbreak forced a broad swath of the U.S. economy to shut down. The Paycheck Protection Program is one of the key federal initiatives to help insulate workers and the economy: If businesses use at least 75 percent of the loan they receive to maintain payroll, the government will forgive it.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article

Public companies tapping small-business loans may not have met necessary certifications, Mnuchin says

Mnuchin: Anticipate ‘most, if not all of the economy’ will be open by late summer

Treasury Secretary Steven Mnuchin on reopening the economy amid the coronavirus, oil prices, and ensuring that small businesses are prioritized in the Payroll Protection Program.

Treasury Secretary Steven Mnuchin on Wednesday questioned whether some big companies receiving millions of dollars in government-backed loans from a program created to help small businesses have met the necessary certifications.

Continue Reading Below

"I think a lot of these big companies [it's] questionable whether they could make that certification," Mnuchin told FOX Business' Stuart Varney. "I think they should review it."

At least 75 publicly traded companies — some with market values well over $100 million — tapped the government-backed Paycheck Protection Program, receiving a combined $300 million in low-interest loans, according to a recent Associated Press analysis.

The loans were among the 4,412 approved by banks and the Small Business Administration worth $5 million or more, according to SBA data. The total amount of loans approved for at least $5 million totaled $30.9 billion — or about 9 percent of all those approved. The size of the typical loan nationally was $206,000, according to the data.

When Congress created the $349 billion program, it directed the loans at companies with fewer than 500 employees. But restaurants and hotels were granted some flexibility in the legislation — so long as they employed no more than 500 workers at any single location, they could apply for the aid.

The money can be used for payroll and other expenses, like insurance premiums, mortgages, rent or utilities through June 30. As long as 75 percent of the money goes toward keeping workers employed and maintaining salary levels, the loans, which are guaranteed by the federal government, will be fully forgiven.

This is a developing story. Please check back for updates.

Source: Read Full Article

Potbelly secures $10M small business loan for virus relief days after exec gets $100K bonus

Trump touts success of SBA loan program

President Trump says small business owners should receive SBA loans by the end of the week.

Get all the latest news on coronavirus and more delivered daily to your inbox.  Sign up here.

Continue Reading Below

Less than two weeks ago, the federal government launched the $349 billion Paycheck Protection Program, aimed at keeping small businesses afloat as the coronavirus pandemic forces an unprecedented shutdown of the nation’s economy.

Among those that qualified for the loans — businesses with fewer than 500 workers may borrow up to 2 1/2 times their payroll, or up to $10 million — is Potbelly Sandwich Shops, a Chicago-based chain with restaurants throughout the country.

On April 10, the sandwich shop secured a $10 million loan from JPMorgan Chase through the program at an interest rate of 0.98 percent, according to a new regulatory filing. The company said the money will go toward “qualifying expenses” in the Securities and Exchange Commission filing.

The money can be used for payroll and other expenses, like insurance premiums, mortgages, rent or utilities through June 30. The loans, which are guaranteed by the federal government, will be fully forgiven if 75 percent of the money goes toward keeping workers employed and maintaining salary levels, according to the Small Business Administration. If the headcount declines, or salaries and wages decrease, forgiveness will be reduced.

ABOUT 70 PERCENT OF SMALL BUSINESSES HAVE APPLIED FOR CORONAVIRUS RELIEF, BUT NOT ALL HAVE BEEN SUCCESSFUL

Payroll costs are capped at $100,000 on an annualized basis for each employee, according to the Treasury Department.

Four days before obtaining the loan, Potbelly promoted an internal employee to the role of senior vice president, chief financial officer and chief strategy officer, effective April 6, according to the filing.

Steven Cirulis, who had worked for the company since December 2019 in a “strategic planning, finance and analytical consulting role,” will be paid an annual one-time cash signing bonus of $100,000 for the promotion, according to the filing.

Cirulis’s annual base salary is $425,000, although the company announced on March 30 that it would temporarily reduce senior executive pay by 25 percent as a result of the virus outbreak. The reduction, referred to as the “Corona Cut,” will continue indefinitely “until removed at the sole discretion of the Company for all senior executives,” the filing said.

WHAT APPLICANTS NEED TO KNOW ABOUT THE SMALL BUSINESS LOAN PROGRAM

Potbelly did not immediately respond to a request for comment.

More than 1.34 million loans worth nearly $296 billion have been approved by 4,800 lending institutions as of Wednesday afternoon, according to the SBA. If the current trend in demand for loans continues — one week ago, about $50 billion in loans had been processed; that jumped to $160 billion by Friday — the program could be close to running out of money by Friday.

Although there’s bipartisan agreement that the PPP needs additional funding, Senate Democrats last week blocked a measure that would have replenished the fund with an additional $250 billion from being passed, pushing for more emergency funding for hospitals and states as well as some changes to the small business aid program.

Despite the popularity of the program, it’s been riddled with glitches and banks have reported an overwhelming rush of applications. Just 2 percent of small businesses in New York, the American epicenter of the virus, have been approved for relief through it, according to data obtained by the Times Union.

In New York, 40,975 loans totaling more than $11.7 billion were approved for small businesses, the Times Union reported. It’s unclear how many businesses in the state applied for the forgivable loans.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Close to 812,000 people filed for unemployment over a four-week period in New York, a stunning 1,446 percent increase from the year-ago period. Across the country, over the past four weeks, more than 17 million Amerians have filed first-time unemployment benefits, a stunning sign of the depth of the economic calamity inflicted by the virus.

Source: Read Full Article

Coronavirus small business relief program running out of cash as Congress feuds over more funding

Trump touts success of SBA loan program

President Trump says small business owners should receive SBA loans by the end of the week.

Get all the latest news on coronavirus and more delivered daily to your inbox.  Sign up here.

Continue Reading Below

A popular small business relief program is in danger of running out of funds by the end of the week, as billions of dollars in additional coronavirus aid remain stuck in congressional limbo.

At the heart of the impasse between Republicans and Democrats is $250 billion to replenish quickly vanishing funds for the Paycheck Protection Program, a $349 billion fund approved last month as part of the CARES Act.

The program provides loans at ultra-low interest rates to businesses with fewer than 500 employees to incentivize them to keep staff on payroll, or rehire workers who have already been laid off. If at least 75 percent of the money goes to keep employees on the payroll, the federal government will forgive the loans.

Already, the Small Business Administration has approved close to 1 million loans worth nearly $225 billion, according to a senior SBA official. If the current trend in demand for loans continues — one week ago, about $50 billion in loans had been processed; that jumped to $160 billion by Friday — the program could be close to running out of money by Friday.

ABOUT 70 PERCENT OF SMALL BUSINESSES HAVE APPLIED FOR CORONAVIRUS RELIEF, BUT NOT ALL HAVE BEEN SUCCESSFUL

Although there’s bipartisan agreement that the PPP needs additional funding, Senate Democrats last week blocked the measure from being passed, pushing for more emergency funding for hospitals and states as well as some changes to the small business aid program.

The stimulus bill passed at the end of March was $2.2 trillion, the largest in recent memory.

Republican aides said conservatives will reject any spending beyond the PPP, while House Speaker Nancy Pelosi has maintained that a small-business-only bill would be rejected in her chamber.

WHAT APPLICANTS NEED TO KNOW ABOUT THE SMALL BUSINESS LOAN PROGRAM

"We have real problems facing this country, and it’s time for the Republicans to quit the political posturing by proposing bills they know will not pass either chamber and get serious and work with us towards a solution," Pelosi and Senate Minority Leader Chuck Schumer said in a joint statement Monday.

Lawmakers from both houses are working from their home states as a result of the outbreak and are unlikely to return to Washington, D.C. until at least early May. (House leaders announced Monday that lawmakers won’t return until at least May 4, and the Senate is expected to make a similar announcement on Tuesday, per Politico).

Time is imperative for owners. Nearly one in four small businesses has shut down temporarily in response to the crisis, while another 40 percent expect to do so within two weeks, according to a survey published by the MetLife & U.S. Chamber of Commerce Small Business Index.

If owners don’t receive further support, about 43 percent have warned they have less than six months to a permanent shutdown. One in 10 say they have less than a month until a permanent shutdown is inevitable, the survey found.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article

Small business loans work — My family's veteran legacy is proof

Small business co-owner shares rough SBA PPP experience

SPACE 519 co-owner Lance Lawson says he’s been waiting a while to receive his Small Business Administration loans.

The recently passed stimulus package authorizes the Small Business Administration to offer 100 percent guarantees for up to $349 billion in loans for small businesses that need to cover payroll, rent and other bills. While these loans may not singlehandedly save our economy, they will be a lifeline for millions of people. I know because a small business loan half a century ago is still impacting my family today.

Continue Reading Below

This isn't the first time small businesses have struggled. During World War II, wartime defense contracts with large companies left many small businesses unable to compete. The Smaller War Plants Corporation (SWPC), a predecessor of the Small Business Administration, provided direct loans to private entrepreneurs. After the war, veterans who had to start careers from scratch got low-interest loans to start businesses, many of which have served our country for generations.

BANK BUREAUCRACIES CONTINUE TO TAINT CORONAVIRUS SMALL BUSINESS RELIEF OPTIONS, LEAVE MANY ON THE CURB

In 1947, after the end of World War II, a 21-year-old Army air corpsman named Murray Goff returned home to New York to begin his life as a veteran and a civilian. He would eventually open his own jewelry store in Brooklyn, and 68 years after the end of his military service, I would marry his grandson wearing a custom ring from this store. It's a testament to the lasting impact of small business loans and veteran entrepreneurship, and one that has touched me and my family through generations.

Murray's father was a tailor, and his mother was a seamstress. They were immigrants who met in 1917, in a sweatshop in lower Manhattan. But when Murray returned home to New York as a new veteran, he had an opportunity his parents had never had – he was able to use his GI Bill to buy the books and supplies he needed to learn the watchmaking trade.

IVANKA TRUMP HIGHLIGHTS $1.6B CORONAVIRUS SMALL BUSINESS ASSISTANCE FROM PRIVATE SECTOR

Watchmakers, in those days, were in high demand; virtually all timekeeping devices were mechanical, and they required regular maintenance. Over the next 20 years, Murray worked as a watchmaker, a jewelry salesman and a jewelry store manager in New York, New Jersey and Virginia. Then, in 1966, married with two children, he decided to apply for a low-interest loan from the Small Business Administration.

I hope that as we support our small businesses during this tough time, people will especially remember our veteran small businesses.

Murray was approved for $15,000 (about $150,000 today) – a fortune to him at the time. When he and his wife left the SBA office, check in hand, they were so certain someone had given them too much money that they left their umbrella in the office and rushed home in the pouring rain without it, afraid to go back.

Goff Jewelers opened in 1967, and that $15,000 has grown into a successful business that has supported Murray's family for over half a century. Today, my husband's brother, Brian, runs Goff Jewelers in Staten Island as a third-generation owner.

I hope that as we support our small businesses during this tough time, people will especially remember our veteran small businesses.

After a period of decline, the number of veteran businesses has risen steadily in recent years, thanks to programs like PenFed Foundation's Veteran Entrepreneur Investment Program, the Small Business Administration's Boots to Business program, and the International Franchise Association (IFA)'s VetFran.

SMALL-BUSINESS CONFIDENCE IN US ECONOMY DROPPED IN MARCH: NFIB

Right now, we need continued support of veteran entrepreneurs from businesses, legislators and consumers. We also need to be thinking to the future about how we can grow our veteran businesses as the economy recovers. Veterans are well-prepared for challenging circumstances through their rigorous training, and this makes them a smart business investment. Officials are comparing this pandemic to a war; those who have gone to war are well-positioned to lead our economy out of this.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

As the director of veteran entrepreneurs at the PenFed Foundation, I have seen that one of the biggest hurdles has been the mystification of how to access capital. With the current economy, many veteran business owners are desperately in need of capital to sustain their businesses. Additionally, others will need capital to start new businesses. Many veterans overestimate how much they'll need to start a business, and they don’t consider entrepreneurship as an option. This overestimation deters them from pursuing business ideas.

I hope that companies and organizations that have the resources will be thinking over the next several months about how they can help connect veteran small business owners with capital. The PenFed Foundation also has a list of resources where veterans can find emergency access to capital.

The potential for job creation from veteran entrepreneurship is enormous. Every year, a quarter of a million military personnel leave the service and enter the workforce. Across the country, there are countless Americans who are the legacies of post-World-War II entrepreneurship. My husband is one of them. One day, I hope we will have a generation of post-COVID-19 veteran business legacies.

Seda Goff is the director of veteran entrepreneurs at PenFed Foundation.

CLICK HERE TO READ MORE ON FOX BUSINESS

Source: Read Full Article

Are coronavirus Small Business Administration loans available for businesses like McDonald's?

Small business loan program saves about 5.7M jobs amid coronavirus

Small business loan numbers continue to increase as part of the government’s coronavirus relief. FOX Business’ Edward Lawrence with more.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

A small business assistance program that's part of the coronavirus relief package Congress passed last month doesn't exclude chains like McDonald's because of a provision that offers loans to hotels and restaurants owned by big brands.

The Paycheck Protection Program is designed to get cash in the hands of struggling small businesses and incentivize them to keep staff on payroll, or re-hire workers who have already been laid off. Businesses with fewer than 500 employees are eligible for forgivable loans under the program.

WHAT DOES THE CORONAVIRUS STIMULUS PACKAGE MEAN FOR RESTAURANTS?

McDonald's locations are either corporate-owned or franchises, and it appears either kind of McDonald's restaurant could apply for PPP loans because the brand is in the Small Business Administration's Franchise Directory.

That poses an interesting situation in which a corporate McDonald's location could apply for the loan, although the company does not plan to make such a move. After all, McDonald's surpassed $100 billion in annual sales for the first time in 2019.

Jovita Carranza, administrator of the Small Business Administration, speaks at the White House April 2. (AP Photo/Alex Brandon)

"We don't think it's the right thing to do right now," David Tovar, McDonald's vice president of U.S. communications, told The Wall Street Journal. "We feel like we are in a good financial position right now."

Businesses of all sizes are competing for up to $350 billion in government-guaranteed loans through the program.

"Every day that goes by, more people are losing jobs and businesses are having to make difficult decisions," Matt Haller, a senior vice president at the International Franchise Association, told FOX Business.

iStock

He said there's confusion for brands like 7-Eleven and Chick-fil-A that use a franchise model but aren't registered in the Franchise Directory.

DOES BUSINESS INSURANCE COVER CORONAVIRUS-RELATED LOSSES?

"We’re hopeful the administration will issue guidance that allows those brands to get on those registries in an expedited fashion," Haller said. "If you look on the borrower application form, there's a checkbox for is your franchise listed on the SBA franchise registry. And there are several thousand brands on this registry with notable exceptions."

FOX Business' inquiry to McDonald's was not returned at the time of publication.

CLICK HERE TO READ MORE ON FOX BUSINESS

Source: Read Full Article