Lots of information has been gushing out in the past few weeks about federal aid for small businesses, with Treasury Department officials working through Friday to finalize rules and regulations for the $349 billion loan-package dedicated to keeping employees on the job.
Bankers and economic development officials are urging Arkansas business owners to be vigilant and reach out to a local lender they trust for guidance.
“There is a lot of noise and predatory things out there in the market and that’s probably going to increase,” said Edward Haddock, district director of the Arkansas office of the Small Business Administration. “There’s going to be a lot of fraud and a lot of disinformation. We’re urging businesses to deal with a banker that you know.”
Haddock and his team at SBA are charged with collaborating with local banks to help spread the stimulus funding to small businesses in Arkansas.
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The whirlwind of activity has bankers working feverishly to keep up as the final loan details are nailed down.
“It’s a bit like building an airplane in mid-air,” said Darrin Williams, Chief Executive Officer of Southern Bancorp Inc. “There’s a desperate need to get this right, so we’re trying to make sure we have the correct plans in hand from which to build it safely and responsibly.”
Here’s what we do know so far:
The $394 billion will provide loans for any business with at least one employee and no more than 499. That’s right, ANY business with fewer than 500 employees is eligible for up to $10 million in aid if operations have been disrupted by covid-19.
If you’re a hair stylist, for example, who rents a chair at a salon and you get a salary and have rent and other overhead expenses associated with your work, you could be eligible for an SBA loan.
The new Paycheck Protection Program introduced by the CARES Act means that salary payments are essentially free for eight weeks; a business is not obligated to pay anything back in principal or interest.
And business owners don’t have to give a personal guarantee or put up collateral to secure financing. Owners merely have to prove they operate a business, they’re paying a salary and their business is suffering economic hardship caused by the coronavirus.
Banks now are putting together resources to evaluate loan requests and approve them quickly. Many have enhanced the resources dedicated to handle customer inquiries and loan requests, and they also are shoring up technology solutions to ensure speedy online responses.
Bankers say they understand the urgent need among the 249,000 small businesses operating in Arkansas.
“We’re working diligently, almost around the clock, to get our processes set up,” said Davy Carter, regional president for Centennial Bank based in Jonesboro. “We understand the great need out there for financial support; the demand for these things is just overwhelming.”
On the small business front, owners are being advised to begin pulling together their payroll and tax information so they are prepared to take advantage of the federal and state loan offerings.
Most importantly, bankers and economic development officials recommend caution: make sure you understand your financial needs and, if you need a loan to carry the business through 2020, make sure you talk with a banker you know and have worked with previously.
Patience is a lot to ask of businesses experiencing severe revenue declines but the short wait should have its just rewards.
“It’s hard to be patient in a volatile time, but we’re all doing our best to work with customers and to meet the needs of businesses and their employees,” Centennial’s Carter said. “We will make sure this money gets in the hands of businesses that need it.”
Lenders say they are moving as fast as they can.
“All financial institutions are currently fielding nonstop calls to lenders seeking guidance and assistance, so we stress patience for everyone as we work as fast as we can to get help where it’s needed as quickly as possible,” Williams added.
Stay tuned – more details will be available in the coming weeks.
NEW USDA EFFORT
Beginning farmers and ranchers now can find more assistance through the U.S. Department of Agriculture, which is building a new team to focus on those businesses.
“More than a quarter of producers are beginning farmers,” said USDA Deputy Secretary Stephen Censky. “We need to support the next generation of agricultural producers who we will soon rely upon to grow our nation’s food and fiber.”
The effort will be coordinated through collaboration with other USDA agencies, including the Farm Service Agency, Natural Resources Conservation Service, Risk Management Agency and Rural Development.
This new initiative will work with state coordinators to develop goals and create plans to increase beginning farmer participation and access to programs while expanding nationwide efforts to beginning farmers and ranchers.
“We know starting a new farm business is extremely challenging, and we know our customers value and benefit from being able to work directly with our field employees, especially beginning farmers,” said Sarah Campbell, a farmer and USDA veteran who has been appointed to head the program.
State coordinators will receive training and develop tailored farmer outreach plans for their states. Go to usda.gov for more information.
WORKFORCE SUPPORT
Enhancing workforce training has been a major effort across Arkansas and American Electric Power is stepping up to help. The electric utility gave a $100,000 grant to NorthWest Arkansas Community College in Bentonville to support skilled trades workforce training, safety, resources and placement programs.
“This generous grant … will provide equipment for our apprenticeship and construction technology programs, specifically in surveying, specialized metalworking, carpentry and prototyping,” college President Evelyn Jorgenson said.
American Electric is the Ohio-based parent company of Southwestern Electric Power Co., which serves approximately 120,000 customers in Arkansas and has offices in Fayetteville.
PESTICIDE TRAINING
Statewide training and certification for private pesticide applicators from the University of Arkansas System Division of Agriculture is now available online.
Online training is being made available to first-time applicators in response to the coronavirus outbreak. Previously, online support was available only for recertification.
Maintaining the current training schedule is important to ensure farmers stay on their spring planting schedule, which includes applying pre-emergent pesticides.
Those interested can access online training at uaex. edu.pat. Training cost is $20, which does not include license fees that must be paid to the state. Certification is good for five years, and private applicators may get a one-year or five-year license.