For Most sports, fitness, and activity organizations, the PPP is an incredible option they should pursue. If you try are unable to get a PPP loan before funding runs out there are several other options already out there. There has also been talk in Washington of additional programs and incentives being included specifically in future Legislation packages. We'll provide additional updates as we learn about them.
#1- (EIDL) Economic Injury Disaster Loans
If you haven't already applied for the EIDL you should do so as soon as possible if it opens again. Unfortunately the best thing you can do is to monitor the SBA website for updates on the application possibly opening again. The EIDL has 2 parts to it.
First, the EIDL includes a grant of $1,000 per employee up to $10,000 maximum that does not need to be repaid. The SBA has in the past said that they will try to pay this within 3 days although most anecdotal data suggests it is currently taking 1-3 weeks to get funds once you complete the application.
The EIDL will also give you the option of taking out a long term loan at 3.75%. Loan payments are deferred until the end of 2020 and they have waived the requirement of a personal guarantee on loans under $200,000. It is worth seriously considering this option.
#2- Employee Retention Tax Credit
The Employee Retention Tax Credit has not gotten enough attention as it has been overshadowed by PPP (If you have taken a PPP loan you are not eligible for this tax credit). For organizations with less than 100 employees the Employee Retention Tax Credit will provide you a 50% rebate on the first $10,000 in wages that you pay to any employee for the rest of the year. You'll be able to take these funds our of certain taxes collected on behalf of employees and at the end of each quarter the IRS will write you a check for any balance owed to you. For certain businesses the Employee Retention Tax Credit may make more sense for your organization than PPP.
Either way if you are unable to get a PPP loan the Employee Retention Tax Credit is something you should absolutely take advantage of.
#3- Expanded Unemployment Offered Via the Cares Act
The Cares act has included several major temporary additions to unemployment:
- $600/week paid to anyone on unemployment each week until 7/25
- Expanded access to unemployment for Self Employed Individuals and 1099 Gig Workers
- Expanded access to unemployment for an additional 13 weeks beyond the typical 26 weeks in most states.
#4- Federal Reserve Main Street Lending Program
The Federal Reserve released an updated outline on May 1st for its Main Street Lending Program with $600 Billion in funds. As its currently written the program has a minimum loan size of $500,000 and a maximum loan size of 4-6X EBITDA. This would make the Main Street Program a nonstarter for many sports, fitness, and activity businesses since it implies you must have EBITDA of over $125,000. The good news is that much of the feedback has suggested that the Fed lower this minimum. Several major banking association have suggested a minimum of $50,000 and there have many who have pushed for the including smaller businesses in the program. It is worth keeping a close eye on this program in the coming weeks.
#5 Phase 4 TBD Programs
There have been numerous quotes from leaders in the administration that the Phase 4 Covid 19 Relief bill may include additional programs and incentives for sports and entertainment businesses. There are also several sports industry groups lobbying for support. While there is no guarantee of anything coming from this, we recommend keeping tabs on the news and monitoring progress on the Phase 4 bill so you can prepare your organization to respond.
Who Is Still Accepting PPP Loan Applications?
Check out our post on banks that are still accepting PPP Loan Applications.
Waitlist for Playbook Discount & Grant Program Now Open
You can now join the waitlist for Playbooks $1 Million discount and cashback and grant program. We can provide your business with up to $25,000 of cash over the next 12 months. If you have questions or want to share your experience you can chat with us or call us anytime. You can also book a 30 minute free conquer Covid strategy session with one of our sports business experts here.