Ami Kassar, the founder and CEO of MultiFunding, provides his insights on the various government loan programs available to small businesses impacted by the pandemic. Ami discusses specifics on these various programs, what they were originally intended for and how to ensure you're making the right steps toward those loans being forgiven.
We’ve been around for just over a decade, as an advocate for small business owners and entrepreneurs during the loan process. We primarily help business owners secure SBA loans and we’ve helped over a thousand local businesses navigate the application process and secure funding. Our median loan size is about $350,000 and our average loan size is close to $3,000,000.
I don’t believe the PPP loan was intended to be an entitlement, it was created to help save jobs and essentially cover 2 months of payroll. With the hope that the worst of the COVID-19 crisis might be behind us. However, I don’t think that is how business owners understood it and it turned into more of a free money grab.
While all of these details are subject to change based on what Congress ultimately decides. When you applied for the PPP loan you applied for 10 weeks of your 2019 payroll costs, of which 8 weeks could be forgiven. The extra 2 weeks of surplus you could use for other business expenses with some restrictions.
When it comes to getting your loan forgiven it can be a little frustrating because the requirements keep changing. I always tell people to check our website for the latest details. As of right now, the SBA released an 11-page forgiveness application on May 15th. This essentially says if you used the funds appropriately, 75 percent payroll and 25 percent approved business expenses, then the documentation is fairly simple.
The EIDL program has been around for a long time and issues loans to small businesses during a crisis. While none of the money is forgivable, it is a long-term loan. Due to the current demand for loans, I believe there is a cap of $150,000 for the loan amount. What people need to know is the only place you can apply for the EIDL loan is SBA.gov, it is a scam if it is being offered elsewhere.
Lastly, the Main Street Lending program is a bit different and it's expected to be out near the end of May. To qualify for the program your business needs to have had at least $83,000 of positive EBITDA in 2019, assuming you had zero debt. These are 4-year loans that are not forgivable and you have two options. There is a new facility or a priority facility, for the new facility you can get 4 times your 2019 EBITDA minus debt and for the priority facility you can get 6 times your 2019 EBITDA minus debt.
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