There are many loan options available, now including the CARES (Coronavirus Aid, Relief, and Economic Security) Act which has recently been approved by the United States Government. Before you jump into applying for financial support, it is important to remember that you will need to pay back this money should you not be eligible to convert this loan to a grant longer-term. A loan today for the same expenses that you have incurred previously could affect your cash flow long-term, especially if you anticipate lower volumes than your typical season.

This article from Harvard Business Journal gives great information on some initial steps to take in response to COVID-19.

Carefully review your current situation to evaluate if there are alternative solutions for your business. Talk to your fellow tour operators for advice, your accountant and/or lawyer and, if you are a FareHarbor client, review Compass for actions that you can take to improve your online presence and receive more bookings as soon as possible. If, after looking at your financial situation and cutting unnecessary costs you still are in a dire financial position, consider applying for a loan.

In addition, it is important to evaluate any loans that you have taken out in the past and other loan prerequisites to ensure that you will qualify. See “How do I apply for a loan?” for more information.

In response to the Coronavirus Pandemic and its effects on the economy, the United States Government passed the CARES Act (includes Paycheck Protection Program and Economic Injury Disaster Loan) that includes $350 billion to support small businesses during this time. The program has expanded beyond the typical definition of “small businesses” to include Independent Contractors and Sole Proprietors.

Small businesses will be able to borrow money for a variety of qualified costs related to employee compensation and benefits, including:

• (i) paycheck costs
• (ii) continuation of health care benefits
• (iii) employee compensation (of those making less than $100K)
• (iv) mortgage interest obligations
• (v) rent
• (vi) utilities
• (vii) interest on debt incurred before the covered period

To learn about eligibility, click here for information compiled by our new partner, Lendio.

FareHarbor Partners with Lendio

FareHarbor partners with Lendio to streamline loan applications. Lendio uses a proprietary algorithm to match small businesses with loan options from a nationwide network of esteemed lenders. Lendio helps small business owners with a tailored hands on approach to expedite the loan process.

• Paycheck Protection Program (PPP)

  • Key Facts:
    • Eligibility – US businesses with fewer than 500 employees (Individual and Sole Proprietor businesses qualify)
    • 1.0% interest rate, 6 months deferred, 2 year term
    • Loan is designed to be forgiven if you spend at least 75% on payroll and maintain or rehire staff
    • Maximum money – 2.5 x (1 month normal payroll expenses) or $10 million

• Economic Injury Disaster Loans (EIDL)

  • Key Facts:
    • Eligibility – US businesses with fewer than 500 employees (Individual and Sole Proprietor businesses qualify)
    • Regular loan – must may back
    • Funds of up to $2 million
    • Up to a $10,000 advance grant
    • 3.75% interest rate and up to 30-year terms

General COVID-19 (Coronavirus) Resources

• Coronavirus Emergency Loans Guide and Checklist for Small Businesses and Nonprofits – US Chamber of Commerce Foundation

CARES Act

• A Guide to CARES Act Eligibility – U.S. Travel Association
• Getting Cash For Your Small Business Through The CARES Act – Forbes.com
• The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) Is Enacted Into Law – Foley & Launder LLP

Paycheck Protection Program (PPP)

• Paycheck Protection Program – U.S. Small Business Administration
• Everything You Need to Know to Get a Paycheck Protection Loan Forgiven – Inc.com
• Paycheck Protection Program FAQs for Small Businesses – U.S. Senate Committee on Small Business and Entrepreneurship
• Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) – Summary of Small Business Loan Provisions (Spilman, Thomas & Battle)

Economic Injury Disaster Loan (EIDL)

• Economic Injury Disaster Loans and Loan Advance> – U.S. Small Business Administration
• FGMK’s Overview of Small Business Assistance Programs – FGMK

NextAdvisor

• NextAdvisor: Advice for entrepreneurs on how to launch a small business during tough economic times