With the news of increased vaccinations and a drop in the number of reported new COVID-19 cases, it is easy to understand the optimism around the expected economic recovery. However, for many Atlanta area businesses, the financial challenges continue as activity has yet to return to pre-pandemic levels. The reality is that local unemployment is hovering at 4.5% and overall Atlanta is still down over 160,000 jobs from last year. This reality means many businesses may still need a working capital infusion to position for the recovery. Unfortunately, the recent announcement the popular Paycheck Protection Program (PPP) had run out of money means one less option is now available. Since it is unclear whether Congress will allocate additional program funds, businesses must now look to other COVID-19 relief programs for assistance. To help clients, prospects, and others, Wilson Lewis has provided a summary of federal and Atlanta programs still available below.
Federal SBA Programs
- Shuttered Venue Operators Grant (SVOG) – This grant program is designed to help live venues, theatres, museums, cinemas, and other performing arts businesses. Eligible applicants can qualify for grants equal to 45% of gross earned revenue with a maximum of $10M. The grant may be used for payroll costs, rent, utilities, and mortgage payments, independent contractor costs, state and local taxes, insurance payments, and related advertising expenses. Since the SVOG is a grant and not a loan, recipients are not required to pay back awarded amounts.
- Economic Injury Disaster Loans (EIDL) – This long-term loan program was expanded at the onset of the pandemic to help businesses have access to a source of low-cost capital. Applicants can receive any amount equal to 24 months of economic injury with a maximum of $500,000. Unlike the PPP, there is a collateral requirement for loans exceeding $25,000 and a personal guarantee requirement for loans greater than $200,000. It is a 30-year loan with no pre-payment penalties or fees, a fixed 3.75% interest rate for businesses, and 2.75% for nonprofits.
Atlanta Funding Programs
- Atlanta Cares Revolving Loan Program (ACRFL) – The program provides financial support to help businesses deal with the severe and sudden financial disruptions caused by the pandemic. Loan amounts vary between $10,000 to $100,000 depending on specific conditions and are only available to small businesses located within the city. There is a 7-year loan term with a 12-month deferral of the first payment, interest rates between 1% to 3%, and a waived application fee. Loan recipients must use funds to help retain jobs.
- Phoenix Fund – This program is designed to provide small and mid-sized businesses with affordable loans. Loan amounts vary between $10,000 to $100,000 based on economic conditions and are limited to Atlanta businesses. There is a three-to-seven-year loan term (fifteen years for real estate), the interest rate is set at ½ of prime plus 2% (4% minimum) and the application fee is waived. It is important to note that recipients are required to create or retain 1 job for every $35,000 received.
- Opportunity Loan Fund – This program is designed to support job growth by providing gap funding to small and mid-sized businesses creating new quality jobs. The loan amount is $100,000 and the structure is 50% private financing and 50% Opportunity Fund loan. The term is three to seven years (fifteen years for real estate), the interest rate is set at ½ of prime plus 2% (4% minimum) and the application fee is waived. Finally, there is a 20% equity injection requirement and at least 5 new quality jobs (providing healthcare) must be created.
Contact Us
Although the Paycheck Protection Program is no longer an available option, it does not mean there are no other programs available to help. The combination of SBA and local Atlanta loan and grant programs offers several important options for businesses. If you have questions about the information outlined above or need assistance with a tax or accounting issue, Wilson Lewis can help. For additional information call us at 770-476-1004 or click here to contact us. We look forward to speaking with you soon.