As a small business owner or someone who is self-employed, you may find yourself in unchartered territory with the current pandemic that’s affecting so many small businesses. Luckily, as of March 27th, the CARES Act – or Coronavirus Aid, Relief, and Economic was signed into law to provide relief and economic aid to individuals and businesses facing financial struggles and instability.
You’ve probably got a lot on your plate and don’t have a lot of time to decipher these loan programs and figure out how they can help you, so we’ve compiled everything you need to know right here so you can figure out which program is right for you.
Paycheck Protection Program (PPP)
The Paycheck Protection Program is a federally guaranteed loan program that helps businesses and nonprofits cover up to 8 weeks of payroll and some other expenses up to $100,000/year per employee. Businesses can apply for 2.5 times their average monthly payroll costs up to $10 million. This number is based off the payroll costs for the previous year.
What Can I Use the Funds For?
Interest on mortgage payments
As long as a business doesn’t lay off any employees or it rehires by June 30, 2020, these loans can be forgiven. Note that loan forgiveness may be decreased if a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees occurs. Loans may not be forgiven if funds are used for other expenses not as outlined above. Whatever amount may not be forgiven will convert to a fixed two-year repayment.
How do I Know if I'm Eligible?
You are eligible to apply for the PPP if you are one of the following:
A small business or nonprofit with less than 500 employees
A sole proprietor
An independent contractor
A gig worker
How Do I Apply?
Applications are just beginning to be accepted. Loans can be applied for by calling your current bank or lender. Here is an example of what you might be able to expect from the application.
Economic Injury Disaster Loan (EIDL)
The EIDL offers both grants and loans, including a $10,000 emergency grant that doesn’t have to be repaid that both business and nonprofits can apply for. This grant will most likely be the fastest way to obtain funds as the SBA states funds will be received within three days of approval. The EIDL also offers low-interest loans that will have to be repaid. Businesses can apply for these loans of up to $2 million in order to cover operating expenses while they experience a lack of revenue. When it comes to repaying the EIDL, the terms are 3.75% for business and 2.75% for nonprofits for up to a 30-year term.
What Can I Use the Funds For?
Unlike the PPP which specifically requires funds to be spent on specific expenses in order to be forgiven, there is more flexibility around what the EIDL funds can be used for. These include expenses such as rent and mortgage, salaries, employee paid leave, and operational expenses. A business cannot, however, use both the PPP and the EIDL for the same purpose.
How Do I Know if I’m Eligible?
The same eligibility for the PPP applies to the EIDL. The applicant also needs to have been in operation on January 31, 2020 and been negatively economically impacted due to COVID-19.
How Do I Apply?
The application for the EIDL is now live and can be found here. While the application is for the loan, there is a spot for you to indicate you also want the $10,000 emergency grant.
How Do I Know Which Program is Right for Me?
First, assess the eligibility requirements described above to determine which program you are eligible for. Bear in mind that the PPP can be entirely forgiven as long as the requirements are met, while the EIDL must be paid back in its entirety except for the $10,000 emergency grant.
You may apply for both programs but remember not to use the funds for the same purpose.
Important Note: Homestead does not grant or finance any of these loans and we have no control over qualification guidelines. This information is merely provided as a guide, as we may feel this could help many of our borrowers and referral partners at this critical time. This information and the details and/or loan availability may change at any time. Please visit sba.gov to find a lender and for up to date information.
Since the CDC recommends social distancing and self-quarantining to slow the spread of COVID-19, children find themselves at home and no longer physically around the friends and teachers they’re used to having around all the time. Here’s how to keep your kid stimulated, challenged, and having fun while quarantined.
1. Virtually Tour Museums and National Parks
Just because you’re staying inside doesn’t mean you can’t explore the exciting and interesting places the world has to offer. From museums to national parks, virtual tours are a great way to experience these places without leaving your home. The National Museum of Natural History is offering virtual tours of their current and past exhibits which you can find here. Many national parks are also offering online tours. Find Hawai’i Volcanoes National Park’s tour here.
2. Reading and Family Story Time
Reading is always a great pastime, but now is an even better time for kids to crack open some books. For younger kids, read to them and talk about the pictures by encouraging your child to describe what they notice about the illustrations. Ask them what they think characters are feeling and have them predict what will happen next.
3. Turn a Walk into an Adventure
Take a walk in your neighborhood and bring with you a check list of different objects you want your child to point out. Name and talk about the things that catch the kid’s attention. Describe the object and what the child thinks about the object.
4. Video Chat with Friends
A good way to help your child continue social interaction while quarantined is to have them video chat with their friends. Even simply coloring together while video chatting is great for helping children feel closer.
5. Online Yoga Classes for the Family
It’s important to stay active all the time but especially now that we’re spending more time at home. YouTube has lots of free kids’ yoga classes to choose from to keep your kid busy, active, and having fun.
Take this time as an opportunity to try new activities and encourage creativity with your kids. Whatever you decide to do with your family as you’re all home, remember to have fun and cherish this time spent together.
Due to the outbreak of COVID-19, many small businesses are faced with the challenge of staying afloat while people self-quarantine. Here are some ways you can support the businesses you care about while staying healthy.
Buy Gift Cards
Purchasing a gift card from your favorite small businesses is a great way to help get them through this time. Plus, you can use it later or give it to someone as a gift!
Get Takeout or Delivery
Many restaurants are still open for takeout, delivery or curbside pick-up. Consider helping them out and enjoying some of your favorite foods by ordering one of these options.
Give Larger Tips
Now is the time to be generous, if you can. Giving a larger tip to that delivery person will go a long way in helping them out.
Take Online Classes
Many small businesses are offering alternatives to their in-person services. From gyms starting up online fitness classes to music instructors giving vocal and instrument lessons online. There are plenty of options for you to continue your routine from home while supporting the businesses you care about.
Say No to the Refund
If a concert or other event you were planning on going to has been cancelled, consider refusing the refund and offering it as a donation instead. This will help performers and venues get by as their events get cancelled.
Shop Local Businesses Online
Online shopping is a great option, and more small businesses are embracing it, now that physical shopping is no longer possible. Check to see if your favorite local businesses are now offering online shopping and, if so, go ahead and order something.
Your favorite small businesses could benefit from some good reviews. I’m sure you’ve visited a restaurant in the past, had a great experience, and forgot to write a review about it. Take the time now to go online to their Facebook pages, websites, and even review sites like Yelp, and leave that positive review!
Give Social Media Support
Along with leaving reviews, try heading over to a business’s social media profile and leave comments, like, and share their content. Giving them this engagement will help their social media profiles grow. Try sharing their posts with people you know who might like what they do.
Now is a great time for all of us to come together to support each other. Small acts such as liking a local business’s post or even just reaching out and saying thank you for what they do can make a difference. Try out some of these ideas and see what a huge impact they can have on others.
Many of us find ourselves confined to our homes due to the outbreak of the COVID-19 virus. While this situation is challenging, there are lots of things we can do to occupy out time from the comfort of our homes. Take this time to accomplish things you usually don’t have time for. Here are some ideas for things you can do while you’re at home.
1. Stay in Contact with Family and Friends
Social distancing doesn’t mean you can’t find other ways to interact with loved ones. There’s always video chatting or even good old phone calls. Reach out to people you haven’t spoken with in a long time as well.
2. Write Them Letters, Too!
With all this time at home you suddenly have, it’s a great chance to practice the sacred art of handwritten letters. A thoughtful card would brighten your friends’ and family’s day while they’re stuck at home.
Now is finally your chance to do all the self-care you’ve been saying you’ve been wanting to do but haven’t had time for. Meditation helps reduce stress and anxiety, increase self-awareness, and promote emotional health. Look up some videos, podcasts, or apps to help you get started.
4. Read the Books You’ve Been Meaning to Read
Do you have a pile of books somewhere, waiting to be read? Well, now’s the time to finally crack those open. Dedicate some time to curl up with books you’ve been wanting to read.
5. Start a Journal
Set aside a specific time each day to write a journal entry. Jotting down a few thoughts can help reduce stress and organize your thoughts. Journaling is also known to help inspire creativity which is something you’ll need to make the most of this time.
6. Clean Out Your Inbox
Is your email inbox overflowing with old emails? What better time to devote to cleaning that out than now when you’re stuck at home? Devote a half an hour to deleting emails that are just causing inbox clutter. You’ll feel so much better once it’s done.
7. Use Coloring Books
Coloring books aren’t just for kids. It’s a great tool for relieving stress and anxiety for everyone. Plus, if you have little ones at home with you, this is a great activity you can all do together.
8. Learn a New Skill
There are plenty of new skills you can learn without having to buy any supplies. From learning a new language or improving your handwriting to becoming a better dancer, learning to code, or teaching your cat tricks, the internet is ripe with helpful content for learning something new.
9. Enjoy Music
Speaking of playing an instrument, this is a good opportunity to enjoy some music. If there’s a new album that came out that you haven’t had the chance to listen to yet or there’s that one artist you love that never gets old, turn on some music and relax.
No matter what you do, try to develop a routine. Routine and structure will help keep you from going completely stir-crazy. Keep in touch with loved ones and keep washing those hands. For more information on how to stay safe during this crisis, visit CDC.gov.
Sunday’s emergency rate cut by the Federal Reserve – also known as the Fed - has been widely reported by the media, and many borrowers are inquiring about lower mortgage rates.
In order to better understand what this means for mortgage interest rates, let’s review a few historical facts about previous Fed Rate cuts. This is not the first time the Fed funds rate has fallen drastically. From 2008 through the end of 2015, it fell to zero. During those years, mortgages rates approached our recent lows especially in 2012-2013, but for the most part they fell in the range of 4% and often 5%. This means, there is little evidence showing that the current zero Fed Funds rate would lead to a massive drop in interest rates.
The 10yr Treasury yield used to be widely used as an indication of mortgage rates, but in today’s environment, that is not the case. At least temporarily, that correlation has broken down. Last Thursday, (March 12th) mortgage rates were moving up as the 10yr Treasury yield was dropping significantly. The next day mortgage rates were improving as the 10yr Treasury yield went up. I’m sure this correlation will re-establish at some point, but it is currently irrelevant.
MBS Live indicates the Fed Rate is a Different Animal Compared to Mortgage Rates
The Fed Funds Rate applies to loans with a term of up to 1 day (essentially last-minute money shuffling between banks in order to ensure everyone has the money they need for the day, if the previous day happened to create an imbalance). Mortgages, of course, can be loans of up to 30 years. Quite simply, investor preferences can vary greatly depending on the duration of a loan. It doesn't get any shorter than the Fed Funds Rate nor much longer than mortgage rates. Consequently, they move in opposite directions all the time.
In conclusion, it is impossible to predict the future, but we can share that clients should expect continued volatility. If you are considering a loan with a rate that works for you, the only way to keep it, is to lock in your rate.