SBA Low-Interest Loans for Small Business Owners
As the country faces the challenges related to the Coronavirus (COVID-19), SBA lenders in the Georgia Association of Business Brokers say they are still in business, approving loans, and can provide information about the SBA’s Economic Injury Disaster Loans.
“The SBA Team at Atlantic Capital is here as a resource to help businesses access the capital they need to continue to run and grow their companies,” says Thomas Rockwood, Vice President of SBA Lending at Atlantic Capital Bank.
Atlantic Capital, Cheryl Beer, Senior Vice President of SBA Lending at the Piedmont Bank, and other GABB affiliates who are SBA lenders say are still approving new loans for borrowers and fully participating in all of the U.S. Small Business Administration (SBA) loan programs designed to assist small business owners. These valuable GABB affiliates are still providing businesses access to capital through the SBA 7a, 504, and Express loan programs, including the Veterans Advantage loans, Woman-owned business loans, and programs for minority-owned businesses.
GABB Board member Kim Eells, Senior Vice President of SBA Business Development at Georgia Primary Bank, said as of March 18, the State of Georgia has been added as a declared state for Coronavirus Disaster Loan Assistance with the SBA. Businesses that have been adversely affected by COVID-19 may now apply for Disaster Assistance directly with the SBA, no banks involved, Eells said. These loans are up to $2,000,000, up to 30 year term, fixed rate of 3.75%. Apply online at: www.sba.gov/disaster.
“I was just on a training/conference call with SBA regarding the disaster loans,” Eells said. “They are going to make it as painless and fast as possible for the borrowers. They said everyone should apply, apply, apply.”
U.S. Small Business Administration is providing low-interest federal disaster loan funds for working capital to small businesses and private, non-profit organizations suffering substantial economic injury as a result of COVID-19.
SBA’s Economic Injury Disaster Loans:
- Offer up to $2 million in assistance
- May be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the
disaster’s impact - Interest rate is 3.75% for small businesses
- Interest rate for non-profits is 2.75%
- Offer terms up to a maximum of 30 years (determined on a case-by-case basis)
Ryan Stoll, Vice President SBA Banker, at Cadence Bank, provided this PDF with more details about the SBA loan program.
Webinar material-Coronavirus 03.14.20
“These funds are intended to replace lost sales or profits or for expansion for those businesses directly affected by the Covid 19 virus.,” said Susan Kite, Senior Vice President of SBA Business Development at Georgia Primary Bank. Susan has also posted information about the loans on the GABB member forum.”We are still making business acquisition loans at Georgia Primary Bank!”
For more information, please contact the SBA Disaster Assistance Customer Service Center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov.
Carolyn Robinson, a Senior Vice President at Acclivity Financial, A Subsidiary of Citizens Bank, said her bank is helping “our borrowers who want a loan payment deferment. We are continuing to underwrite, process and close loans.”
Carolyn provided additional details about the three-step process for applying for SBA disaster loans.Three_Step_Process_SBA_Disaster_Loans
The GABB encourages small businesses to contact one of the many SBA lenders in our association because these lenders have a proven track record of successfully working with business owners.
“We hope that all of you stay safe and healthy in the coming weeks and months,” said David Brindley, Vice President of Live Oak Bank. “Together, we will get through this challenging time!”
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The Silver Lining in the Coronavirus: Think Positive!
Photo by Skitterphoto from Pexels
By Dean Burnette, GABB President and managing broker of Best Business Brokers of Savannah
In the last few days my email has had a growing amount of Covid-19 Update emails! When I turn the television or radio on I hear or see “Corona virus” 100’s of times. Although coverage of a global pandemic is understandable, we’re only human.
If exposure to the virus doesn’t get us, hearing bad news may.
Being an eternal optimist with real life experience through several world economic cycles, including the oil embargo of the 1970’s and 1980’s, The Y-2-K threat of 2000, the real estate bubble, I’m quite confident that most of us will survive this. In fact, some will prosper and some will not.
There will be short term challenges. I have been personally impacted by the current travel challenges. One buyer was supposed to fly in from Chicago last week to look at a business, another client was supposed to fly down from Ohio, and they both had to cancel. I’m expecting a buyer from New York to fly into Savannah Saturday morning, and I’m wondering if he will actually make it?
Some will be impacted more than others; I hope we will be compassionate and aware of other’s struggles. As in the past, most people will come out the other side of this challenge better than they imagined. In each of these cycles, new industries were created!
New industries will be created; some will become obsolete.
We’ve all learned a new term with Covid-19, Social Distancing. I’ve long said that there are some people you have to love from a distance, and social distancing certainly puts a new spin on that! The world may never be the same again.
I am over 60, and so I am at a higher risk than the general population and should take extra precautions. With all the technological advances in communication and social media, I don’t know whether to feel safer or more vulnerable with my higher risk senior status. But I do know that in every crisis, there are possibilities, a silver lining in a rain cloud.
The positive side of the Covid-19 experience
This too shall pass and probably sooner than we imagine! The world is much better equipped to overcome pandemics and other challenges that come at us. We are currently witnessing in real time the wonders of technology and the benefits we have in this day and time.
Instead of dwelling on the negative aspects of our current world challenges, we can find the silver lining. For example, I have two clients who have been able to secure business loans because of the lowered interest rates. After being cooped up for a couple of weeks or longer I believe people will fill up their gas tanks with cheap gas and travel locally, spend money in small businesses. I hope we can use this time of solitude to appreciate our families more and get some of those closets, garages, or spring cleaning done.
Opportunities will emerge
Other bright spots:
- Gasoline prices are very low.
- Interest rates are at historic lows, creating many opportunities for economic growth through new manufacturing opportunities and business expansion.
- Instead of going on cruises and traveling to other countries, people will fill up their tanks and spend their money locally in small businesses. More people will drive to Savannah or visit the Atlanta Aquarium!
- Many companies are encouraging people to work from home during the crisis, and after the crisis many will continue working from home.
- We all have learned the best way to wash our hands, and we’re washing more frequently, and most of us will be more aware of our health and hygiene.
- Because of our new awareness of how much we depend on foreign companies for vital products, more manufacturing will be done here.
- New industries will be created and more jobs and business opportunities will result from this crisis.
If you have been considering buying or selling a business, the stars are lining up, interest rates are low, and the U.S. government will be putting extra efforts into economic stimulus. Gas prices are very low, and people will have more money to spend in local businesses. The list goes on. If you have been waiting for the right time to buy or sell a business, that time is now. It sometimes takes months to close a deal, by that time the virus will be history, and businesses will beginning to flourish again!
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“Irksome Geopolitical Concerns” Are Potential Curveballs to 2020 Economic Growth Prospects
ATLANTA–Having the Federal Reserve on hold for the foreseeable future, bipartisan agreement on fiscal spending and the signed phase one tariff deal with China have reduced the uncertainty that typically bedevil growth prospects, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
“The seeds for 2020 growth were sown last year,” Dhawan wrote in his “Forecast of the Nation,” released Feb. 26, 2020. “In early 2019, business investment was already waning (after the boost from the Dec. 2017 tax reforms) when it hit a few potholes.”
Those potholes were the shocks of a sharp drop in oil prices and the grounding of Boeing’s 737 MAX, causing a contraction in business spending by late 2019.
“The die was cast for a growth slowdown in 2020,” Dhawan said.
The typical economic pullback experienced during a presidential election year began earlier than usual this cycle when election rhetoric heated up ahead of when expected.
Dhawan posits that subpar GDP growth (1.6 percent) in the first half of 2020 will be followed by a ramped-up GDP of 2.0 percent in the year’s second half due to a “positive exigent circumstance” when the 737 MAX returns to the skies in mid-to-late summer – tempering the impact of the ongoing presidential cycle slowdown.
Potential curveballs could beset Dhawan’s baseline forecast, the most obvious being a delayed return of the 737 MAX.
The forecaster is more concerned about what he described as “irksome geopolitical concerns” – e.g., Middle East flare-ups affecting oil production and capacity, kinks in the trade deal with China, post-Brexit uncertainty in EU-UK relations, action on past threats about German auto exports, and COVID-19, the coronavirus that first appeared in late 2019 in Hubei province, China, which Dhawan said is “the biggest threat to the 2020 forecast.
“At present, the key issue for us the incidence of spread of the virus outside China, and the Chinese have taken steps to limit it,” Dhawan said. “But, unlike a finite event, such as a hurricane or earthquake, the coronavirus is still playing out, making it hard to assess economic impact.”
The biggest economic problem now, according to Dhawan, is that factory workers are stuck at home after the Chinese New Year holiday.
“China is a vital part of the world’s supply chain for goods ranging from toys to iPhones. For an economic impact to happen, this disruption would need to last awhile, say until mid-April. When inventories run out, what will Amazon sell here? What will Apple and Samsung do?” Dhawan asked. “This is what I worry about the most.”
Highlights from the Economic Forecasting Center’s National Report
- Overall GDP growth will be 1.8 percent in 2020, 2.0 percent in 2021 and 1.7 percent in 2022.
- Investment growth will be only 0.6 percent in 2020, 4.3 percent in 2021 and 3.6 percent in 2022. Monthly job gains will be 143,000 in 2020, drop to 104,200 in 2021 and a similar 94,400 in 2022.
- Housing starts will average 1.258 million in 2020, 1.224 million in 2021 and 1.234 million in 2022. Vehicle sales will average 16.3 million in 2020, and 16.0 million in 2021 and 2022.
- The 10-year bond rate will average 1.9 percent in 2020, 2.7 percent in 2021 and 3.0 percent in 2022.
Geopolitical Developments Are a Cause of Concern for Georgia’s Forward Momentum
ATLANTA–Georgia’s maturing business cycle and weakening job quality mean economic and geopolitical developments will have greater impact than when the growth path was accelerating between 2013 and 2017, according to Rajeev Dhawan of the Economic Forecasting Center at Georgia State University’s Robinson College of Business.
“The two most important drags to growth are, mercifully, out of the picture in 2020. No tightening is expected by the Federal Reserve and there is a bipartisan agreement on federal spending. Additionally, the threat of ever-increasing tariffs on Chinese imports is off the table with the phase one deal signed last month,” Dhawan wrote in his “Forecast of Georgia and Atlanta,” released Feb. 26, 2020. “But Georgia’s catalyst sectors (manufacturing, technology and large firms with global operations) face other headwinds, namely global economic malaise and geopolitical developments.”
Dhawan characterized the quality of the 70,000 jobs Georgia added last year as “a bit of a disappointment. More jobs mean more paychecks, which fuel spending, resulting in the collection of sales tax at the cash register. But the purchasing power of these new jobs was weak. Georgia’s net sales tax collection growth of 2.7 percent in 2019 was woefully lower than the 5.6 percent growth in 2018.”
This happened even as the state added 46,500 jobs in the last six months of 2019. Looking at job additions by sector, 60 percent of those jobs were in just two sectors, hospitality and healthcare, accounting for about 25 percent of the employment base. These two sectors typically pay less than the high wages of the catalyst sectors. From 2014 to 2018, when growth was balanced, hospitality and healthcare accounted for 30 percent of job growth, closer to their share of the employment base.
“The seeds of future growth are not sown in these two service sectors,” wrote Dhawan. “Growth always begins in the catalyst sectors, especially those producing high paying jobs and creating demand for downstream services in these sectors.”
One catalyst sector, manufacturing, is dealing with trade headwinds and a weakened global economy, especially stagnation in Europe – a big buyer of Georgia machinery and industrial goods. As a result, the sector has gone from 8,400 job gains in 2018 to only 1,000 in 2019. A bright area in manufacturing is announcements that small manufacturing firms are hiring or setting up new plants.
“This shows that small manufacturing concerns that deal primarily with national demand are willing to risk expansion. Gainesville, which has a big cluster of these types of firms, grew 4.1 percent in 2019,” Dhawan wrote.
The forecaster is concerned about potential geopolitical developments – Middle East flare-ups causing oil price spikes, kinks in the trade deal with China, acting on past threats of tariffs on European auto imports, and COVID-19, the coronavirus that first appeared in late 2019 in Hubei province, China, which Dhawan said is the biggest “threat to the 2020 forecast.
“At present, the key issue for us is the spread of the virus outside China,” Dhawan said. “But, unlike a finite event, such as a hurricane or earthquake, the coronavirus is still playing out, making it hard to assess the economic impact from stoppage of Chinese factory production.”
“China is a vital part of the world’s supply chain for goods ranging from toys to iPhones. For these goods to be delivered to customers they first must arrive at our ports. Less production in China means less cargo arriving at U.S. ports, and subsequently less trucking and warehousing demand. This is a potential threat that one of our main engines of growth, the Port of Savannah, faces if the virus induced shutdown in China lasts until mid-April”.
Highlights from the Economic Forecasting Center’s Report for Georgia and Atlanta
- Georgia will add 54,400 jobs (9,800 premium jobs) in 2020, gain 47,400 jobs (8,700 premium) in 2021 and increase by 43,300 (7,900 premium) in 2022.
- Nominal personal income will grow 4.5 percent in 2020, 4.8 percent in 2021 and 4.7 percent in 2022.
- Atlanta will add 41,700 jobs (8,300 premium positions) in 2020, moderate to 34,400 jobs (7,000 premium) in 2021 and 28,500 jobs (5,900 premium) in 2022.
- Atlanta housing permitting activity will fall 6.1 percent in 2020, decline 2.6 percent in 2021 and fall another 0.9 percent in 2022.
2019 A Boom Year for Georgia Economic Development
Georgia enjoyed an excellent year for economic development in 2019. The Georgia Department of Economic Development released an online “Year in Review” highlighting the state’s accomplishments.
In January 2020, Georgia was named No. 1 for workforce development in Site Selection Magazine’s 2020 Workforce Development Rankings for the South Atlantic Region.
Record job and employment numbers were announced for 2019, too. Georgia set a record for total number of jobs at 4.65 million, our unemployment rate reached another historic low of 3.2%, and our workforce reached 5.13 million – another record high. Take a look at a digital copy of our FY19 Year in Review for more GDEcD highlights and success stories.
These accomplishments are clear evidence that Georgia’s comprehensive, team-focused approach is working. Our status as the No. 1 state to live, play and do business has been well-earned!
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