Just 30 days ago, all was relatively still OK in the business community. A few western states were having outbreaks but nothing like we have seen in the past two weeks. On March 20th, there were 18,747 cases of COVID-19 in the United States. During the preceding week, the government passed the $10 Billion EIDL loan program for small business which offered a loan up to $2.0 Million to small business owners at 3.75% interest and up to a 30-year pay back. At the time of the passage, $10 Billion was an unprecedented amount of money for the SBA. These loans only have a few requirements; a credit score of the owner >600 and three years of operating history. The Government ran out of money within three weeks. Before I go any further, you should know that historically, most small business owners in America are not eligible for SBA loans and they are very difficult to obtain. They require hard assets, personal guarantees, excellent credit history (>750) and can take up to six months to obtain. As a result, the only credit many small business owners can obtain is through hard money lenders and high interest credit cards.
Two weeks into the SBA EIDL program, the government also shifted quickly to use some of that money for emergency funding of up to $10,000 per business owner while their applications were being vetted. BREAKING NEWS! The EIDL loan program is going to get a $50 Billion shot in the arm by the end of this week. It is the single largest loan program ever in the history of our country and requires no personal guarantees and no collateral.
The PPP program CARES ACT was next at $2 TRILLION. $310 Billion for eight weeks of payroll expenses that does not have to be paid back if you do not lay off more workers. This loan is basically 2.5 times your average monthly payroll expense. Seventy-five percent (75%) of that money must be used on payroll expenses. The other twenty-five percent (25%) can be used to pay rent, utilities including telco and cable, workers compensation and other necessary business insurance premiums and medical premiums. BREAKING NEWS! By the end of the week, the CARES act is going to get an additional $310 Billion in funding.
That means that so far, small business owners are receiving $360 Billion in support and in the next few weeks they will receive another $360 Billion. THEY WILL HAVE MORE MONEY and greater capacity to run their business than ever before.
ACCESS Receivables is, as always, working in a kind, compassionate way (Nice People Collect More™) to inform debtors of the vast amount of money that is available to them through these programs. Our staff is highly trained and continually educated on the benefits and opportunities that these unique programs are going to create. The media preaches doom and gloom with BREAKING NEWS, but the United States government just invested close to $5 Trillion into our economy. Every consumer, small business and even large business that has been severely affected by this pandemic will be addressed.
We do not celebrate these events. We are hunkered down working remotely as most of you are and we are concerned for ourselves, our family, and our friends. But there is a bright light ahead at the end of this tunnel.
We are grateful for our valued clients and our amazing staff during this time and we are committed to providing the best services in BPO and third-party debt collection services to help businesses as well as their delinquent customers. While you may think you can’t collect your A/R during this pandemic, communication is key. Our Nice People Collect More™ culture is the bridge to keep this vital business function moving forward.