There are two looming deadlines for business owners and entrepreneurs to consider in the Cares Act's debt and financing benefits. If you apply for and close an SBA loan before September 27, your first six months of payments will be forgiven entirely. And the current deadline to close a Main Street Loan is September 30.
While two months feels like a lifetime in this crazy world we live in, it is a short window to close one of these transactions. So it is imperative that if you are interested in taking advantage of either benefit, you put the pedal to the metal.
In order to receive a new SBA loan, your business will likely have to be performing OK in 2020, compared to the same time last year. You can use the credit to refinance existing debt, buy out a partner, obtain working capital, buy your building, etc. If your loan request is for $350,000 or less, the process is more straightforward, and the SBA will not require a lien on your home or a first lien on your company assets.
While the Main Street Lending program is off to a slow start, it is starting to pick up some steam, and we expect to see closings increase over the next few weeks. That being said, applying for these loans is not quick, and unless the Federal Reserve extends the program, we think applications have to be in the first week of August to have a shot at making the deadline. For those who are interested, I will be giving an Aminar about Main Street at Noon EST today.