JONESBORO, Ark. (KAIT) - In the wake of COVID-19, a lot of small businesses have been indirectly impacted, causing many to let go of their staff and even shut their doors.
There are federal loans available for these businesses as well as many rumors and misinformation being circulated.
Centennial Bank Regional President Davy Carter says the bank wants to help all banks and community members make the best choice.
Two loans that will be offered to small businesses.
The first, which is already open and available for people to apply for online, is the Economic Injury Disaster Loan (E.I.D.L.). Under this loan, coronavirus has been declared a disaster.
This loan will be given directly from the Small Business Association.
The highest interest rate is 3.75 percent but it depends on what kind of business you have. You are able to use this money for anything operational, like payroll and working capital.
The important thing to note with this loan is there’s no loan forgiveness.
Officials believe the loan will be available for the public on April 3 or in the next week. You can apply through your bank or SBA lender.
The P.P.P. loan is based on two and a half times your average monthly payroll cost.
So, this loan really focuses on those businesses that have staff.
The interest rate could max out at 4 percent.
Borrowers can use this loan for anything from payroll, rent and utilities.
There is also loan forgiveness.
Title- Paycheck Protection Payroll (PPP) – CARES Act
- Not available yet; Tentative date April 3rd
- Loan through bank or SBA Lender
- Based on 2.5 times your average monthly payroll cost.
- Interest Rate: .50 % fixed rate
- Loan Forgiveness.
Carter says this is just the basics of what people need to know when looking for what’s best for them.
“We want accurate information in the hands of as many people as possible. I am sure, most of all of the other banks in our area, are going through the same things we are as well… trying to get the information in and processes set up to help take care of our customers,” Carter said.
Carter says research is extremely important during the process and that people or businesses need to be sure to consult their bank or legal adviser before making any moves.