The current state of businesses during the COVID 19 pandemic and the Cares Act of Paycheck Protection Program, Economic Industry Disaster Loan, and The Main Street Lending Program


Since the COVID 19 Pandemic began, many industries have become prohibited in lending such as bars, restaurants, gyms, or any other business where many people gather. The way the United States has operated has completely changed. Many people are staying inside, and it is mandatory to wear a mask everywhere you go. This has narrowed the industries that investors are lending to such as Health care, auto repair and grocery stores which count as essential businesses. This is great that working capital is still being deployed but this leaves many industries on pause such as law firms and accounting firms which were once considered high risk but now considered prohibited. This is only a handful of industries affected compared to a truck load of industries who are also affected. This has forced the government to add stimulus to the 40 million Americans unemployed and over $600 billion dollars to businesses to continue their operations.

Paycheck Protection Program

First and foremost a great program, that allows businesses owners to take on a loan 2.5x their monthly payroll. But the underlying problem is although businesses are stimulated with capital to help their payroll and other business expenses; the economy is not moving forward at the pace it should be. People are afraid, people are sick, and employers do not have the capacity to hire the people they once had because there are limited tasks available for people to make a living.

Economic Injury Disaster Loan

Another great loan for small businesses that give businesses capital between $50,000-$150,000 with a 12-month deferment, 3.75% APR and monthly repayment for 30 years. The capital is there for small business Loans for owners and quite plentiful but again there has been slow progress with business owners able to hire the employee count they once had because of the slowdown in the economy.

Main Street Lending Program

The great loan that gives business owners 4x6x their annual 2019 before earnings, depreciation, taxes, and amortization. For example, a business owner with 2019 annual earnings of $1MM before earnings, taxes, and amortization can acquire $2MM-$5MMM in a loan amount with a 12-month deferment, 3% APR, under a monthly repayment plan.

Joshua Triplett and VIP Capital Funding consultants have made a great effort in getting these programs delivered for small businesses in great combination but the only concern right now in the short term is that the deployment of capital is being put to work at a slow pace. The government has done a great job in aiding both employees and employers but the rate at which jobs are being created and the economy moving forward is slow. We can only speculate that everything will bounce back even stronger than before within the next 12 months. The United States is an extraordinarily strong country and COVID-19 is just miniscule adversity that we are adapting to and putting the right plans in place to make for an economy that will be stronger than ever before.