The Mill City Times Interview: Brian McDonald, Acting District Director, Minnesota District, U.S. Small Business Administration
Article by Becky Fillinger
Editors Note: As of 04/17/2020 funding for this program has been exhausted. Congress is deciding on authorizing additional funds.
The Small Business Administration (SBA) is leading many of the relief programs for small businesses in the country. We skyped with Brian McDonald, Acting District Director, about the programs and ways for us to stay informed.
MCT: What are the loans under CARES (Coronavirus Aid, Relief and Economic Security) Act that Minnesota small businesses may be eligible for?
BD: First, let me point readers to our site which lists comprehensive information on financial relief resources for small businesses but much more too. We all understood that timing was critical and that we needed to have the program up and running quickly. On March 27, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses. The regulations to implement the CARES Act were issued in 5 days, something that normally takes 3-6 months.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. At least 75% of the forgiven amount must be used for payroll. Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 years and an interest rate of 1%.
Small businesses should consult with your local lender as to whether it is participating in the program. Lenders started processing loan applications last Friday on April 3, 2020. Applications for the Paycheck Protection Program are available through June 30, 2020.
Another option in response to the COVID-19 pandemic for small business owners is applying for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid. The Economic Injury Disaster Loan advance funds will be made available within days of a successful application. To apply for a COVID-19 Economic Injury Disaster Loan and loan advance, click here.
Things are changing rapidly - daily - and we will keep everyone up to date via our social media channels and newsletter. We’re offering a webinar on Monday, April 13 at 9:00 AM to provide more information to Minnesota small businesses. The registration link is here.
MCT: We hear news that some glitches have happened with loan applications. Are processes getting better?
BM: Day one for accepting applications was last Friday. Even on day one, 1100 lenders were able to participate in PPP loans. We’ve been holding training sessions two times a day to assist small businesses with the paperwork and any questions. We have streamlined the process even more since the first day and will continue to make enhancements.
MCT: What is your day to day like during the COVID-19 pandemic?
BM: We’ve never experienced the volume of telephone calls and emails that we’re receiving now. We’re working every day of the week to make the benefits available to small businesses. When we get through this time period, we’ll emerge stronger because of all the new partnerships that have been built. We have connections now that we didn’t even know we needed a month ago. This interview today with the Mill City Times is a prime example.
MCT: How can we stay up to date with SBA news?
BM: We would welcome any small business to stay up to date with us! Our newsletter signup link is www.sba.gov/updates. Everyone can also follow us on Twitter @sba_minnesosta. We send out regular updates via these channels. There is also some good information on http://www.sba.gov/mn, which includes Payroll Protection Program lenders in Minnesota and also local COVID-19 resources.
MCT: How may we as the public help your office?
BM: There are many scams circulating now that the billion dollar relief programs have been announced. Here is some great guidance to help you:
Lastly, please be patient. We’re just starting this process. Applications for loans may be submitted through June 30, 2020. Please know that we’re here and working to make the processes understandable and simple.
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About Becky Fillinger
I’ve been a resident of the Mill District only since July 2019, but have visited the Guthrie, the Farmers Market, restaurants and friends in the area for many years prior to making the leap to Minneapolis. I’ve lived in many places (and climates) in the US and can testify that our cultural events, bicycle and hiking trails, parks and green spaces, museums, diverse neighborhoods and wonderful restaurants put Minnesota and Minneapolis high on my best places list. I’m a member of the Mill City Singers and look forward to our choir practices and performances.
One of my main interests is community - a very broad concept. For me it means bringing people together with common interests to form meaningful relationships. I look forward to reporting on businesses and individuals in our neighborhoods. Feel free to drop me an email at becky_fillinger@hotmail.com with your thoughts and ideas for stories.