Is your business located in a rural area and is it affected by COVID-19?
Healthcare and hospitality are among businesses hardest hit by the COVID-19 pandemic. Resources are stretched thin in senior care and rehabilitation centers, hospitals are struggling to cope with COVID-19 victims while accommodating the urgent medical needs of other patients, and there are concerns about physician office visits.
Similarly, most people have cancelled their travel plans and suspended their outings because of the COVID-19 lockdown. This has left hotels and motels vacant, tourist attractions like wineries and vineyards empty and restaurants on the verge of bankruptcy.
Nowhere is the economic impact of the COVID-19 pandemic felt more, but easily overlooked than in rural America. If your healthcare or hospitality business is in a rural area and you have suffered a downturn in revenue or other hardships as a result of the pandemic, take heart because thanks to the U.S. Congress, you may be eligible for relief that will not only help you recover but even set you up for future growth.
On May 22nd 2020, the government approved a special funding assistance program to help you weather the COVID-19 storm. The USDA Business and Industry (B&I) CARES Act program can provide you with a working capital loan to reduce the impact of the pandemic on businesses in rural areas, including your healthcare or hospitality business. The term of the loan may be up to 10-years, and principal and interest payments may be deferred up to 12 months.
How do I know I am eligible?
To qualify for this support, your business must have been in operation on February 15, 2020 and located in an area with a population of fewer than 50,000 people. Your company must also be majority American-owned
How much can I borrow?
You can borrow up to $25 million, but the maximum is 12 times your total average monthly cost of doing business. For example, if your average monthly working capital = $21,000, then the maximum amount you can borrow is 12 X 21,000, which is $252,000. The minimum amount you can borrow is $250,000.
What can I use the loan for?
You can use the proceeds for a wide range of legitimate business purposes. These include wages, salaries, healthcare and other employee benefits, administrative expenses, service contracts, property insurance, hazard and other business insurance, principal and interest payments, routine maintenance, utilities, inventory, taxes etc.
What can’t I use the loan for?
There are only a few legitimate business uses that are not allowed. These include construction, expansion, equipment purchase and refinancing of debt incurred prior to February 15, 2020. Loan proceeds may also not be used for distribution or payment to anyone retaining ownership in
the business.
What else do I need to know?
To qualify for this loan, you must provide collateral that is at least equal to the loan amount. You must have hazard insurance on the collateral. You, as well as the business and principal owners with 20% or more interest in the company must have good credit. USDA may also require life insurance and personal guarantees for all principals.
How do I access USDA COVID-19 CARES support?
We are LaGray Finance; a commercial loan brokerage firm partnered with banks and lending institutions nationwide, authorized to transact USDA COVID-19 loans. We are therefore positioned to work with you no matter where your business is located. We will assist in packaging your application and quickly securing your loan.
Just a caution! This COVID-19 CARES program ends on September 30, 2020, which is just around the corner. That is why you need our professional services for fast and stress-free access to the financing you need. We will help you stay in business during these challenging times and grow your business after the storm is over.
