SBA: EIDL Loan Program Reopens to All Small Businesses

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After EIDL money grew tight, the Small Business Admin. offered less disaster-loan money and limited it to agriculture, but now it’s reopened to all small businesses.

WASHINGTON – The U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19.

In early May, SBA placed new restrictions on Economic Injury Disaster Loans (EIDL) as demand skyrocketed and funding evaporated. The changes stopped many real estate pros from applying for aid because it not only capped the amount available, but SBA limited it to agricultural businesses.

On Tuesday, however, SBA sent out an email saying the program was expanding again to “further meet the needs of U.S. small businesses and non-profits.”

“With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” says SBA Administrator Jovita Carranza.

Carranza says SBA has improved the application and closing process with new technology and automated tools.

EIDL offers long-term, low interest assistance for a small business or non-profit. The loan can be used to cover payroll and inventory, pay debt or fund other expenses. EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses experiencing temporary difficulties – and the emergency grants don’t have to be repaid.

SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance

  • The low-interest federal disaster loans offer working capital to small businesses and non-profit organizations suffering substantial economic injury as a result of COVID-19. They’re available in all U.S. states, Washington D.C., and territories.
  • The loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact – and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75% for small businesses and 2.75% for non-profits.
  • Loans generally have long repayment terms – up to a maximum of 30 years – and the first payment is deferred for one year.
  • Small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance provides emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. It does not have to be repaid, and small businesses may receive an advance even if they aren’t approved for a loan.
  • The SBA will also help small businesses and non-profits access the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30, 2020.

For additional information about SBA’s response to the COVID-19 pandemic, visit its website.
By Kerry Smith

© 2020 Florida Realtors®

FSU Study: 15.2% of U.S. Small Businesses Won’t Be Back


A survey of small U.S. businesses and nonprofits found that 14.5% closed temporarily and 31% are operating below 40% capacity. But Fla. businesses weren’t hurt as much.

TALLAHASSEE, Fla. – A survey of U.S. small businesses by Florida State University (FSU) researchers found that 15.2% of those studied have closed their doors permanently as a result of the COVID-19 shutdown.

Assistant Professor of Management Samantha Paustian-Underdahl led the research team that examined the effects of the COVID-19 pandemic on 567 small businesses and nonprofit organizations (NPO) throughout the United States. Funded by the Jim Moran Institute for Global Entrepreneurship in the College of Business, the survey asked participants to provide feedback on employee layoffs, government loan programs, operating capacity and stress levels, among other factors, to measure how businesses have changed daily operations during the global pandemic.

It found that 15.2% of participants closed permanently, and 14.5% of participants closed temporarily. Another 31% of participants are operating below 40% capacity, while almost 40% of participants are operating at 40% or higher.

Participants also were asked if they laid off employees during COVID-19, and 46.7% reported doing so, while 51% reported that they did not. The average number of employees laid off was 10.5.

“Small businesses and nonprofits have taken a huge hit during this time, with nearly 30% of our sample needing to close temporarily or permanently as of early May,” says Paustian-Underdahl. “The good news is that most organizations are getting some help.”

Of the participants who applied for government funding, nearly 92% received some type of financial assistance.

Florida seems to be faring better than other parts of the country, as only 10% of the 137 Florida businesses in our sample have temporarily or permanently closed, and only 32% have laid off any employees,” Paustian-Underdahl says.

Government loan programs

Participants were surveyed about their experience applying for and receiving funds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). Overall, business owners and non-profit leaders received funding from one of the government loan programs – but not both.

Of the respondents, 75.5% applied for one or both types of government aid. Of participants who applied, 28.9% received PPP funding only, 26.8% received EIDL only, 11.3% received both PPP and EIDL, and 8.3% didn’t receive anything.

COVID-19 and personal stress

“Consistent with recent research by Gallup, we found that women who own small businesses are experiencing higher levels of stress and burnout during COVID-19 compared to men,” Paustian-Underdahl says. “While some may assume this could be due to higher work-family-conflict, we found the men surveyed are reporting higher work-family-conflict than women.”

One reason could be that women are already used to juggling work with family, but men may be making more of an adjustment during COVID-19, Paustian-Underdahl says.

“Despite being more stressed, the women in our sample are more satisfied with their performance and that of their organizations during COVID compared to men, so maybe their hard work is paying off,” she adds.

Through a series of open-ended questions, participants were asked to share strategies and solutions they’ve implemented to meet the challenges faced during COVID-19.

The most common strategies included:

  • Increased communication with employees to ensure tasks are followed and support is given during these difficult times
  • An increased focus on implementing technology and creating online content in greater frequency than before the pandemic
  • Shifting from actively seeking new clients and instead creating unique ways to contact and keep existing clients
  • Adopting cost-cutting strategies, including reducing full-time employees to part-time, layoffs, furloughs and/or implementing creative new tasks for employees
  • Pivoting into new services, goods and customers
  • Increasing their focus on healthy living, exercise and mental health for employees and customers

© 2020 Florida Realtors®

Fla.’s Ban on Evictions Extended Through June

evictionsBy Kerry Smith
Just hours before the moratorium on evictions and foreclosures was set to expire, Gov. Ron DeSantis issued a new executive order that extends the current ban to July 1.

TALLAHASSEE, Fla. – Hours before a ban on Florida evictions and foreclosures was to go into effect, Gov. Ron DeSantis extended the current moratorium a second time. On Monday night around 8 p.m., the governor issued a new order that extends the ban until 12:01 a.m. on July 1.

DeSantis announced the extension without comment via an email, according to the Orlando Sentinel.

“I hereby extend Executive Order 20-94, as extended by Executive Order 20-121, until 12:01 a.m. on July 1, 2020,’’ the executive order reads (Executive Order 20-137).

The extension puts Florida’s foreclosure moratorium on track with a federal moratorium for loans held by entities such as Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA) announced earlier that the eviction moratorium on single-family home foreclosures was extended to June 30.

While the order impacts evictions and foreclosures until July 1, it does not change Florida law, nor does it relieve tenants or parties to a transaction from their obligations under existing contracts.

The original order itself makes that clear, saying, “Nothing in this Executive Order shall be construed as relieving an individual from their obligation to make mortgage payments or rent payments.”

© 2020 Florida Realtors®

Why Home Prices May Be Rising During the Pandemic


Many sellers are reluctant to cut prices. About 4% of sellers cut their prices in the week ended April 25, down from 5.7% in the same week last year.

WASHINGTON – The median home price rose 8% year-over-year in March, according to the National Association of Realtors (NAR). While buyer demand has softened and sales fell 8.5% from February, recent preliminary data indicates that the supply of homes on the market is contracting even faster.

The March NAR data largely reflects purchase decisions made in February or January. Even by the end of last month, many sellers were reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Some sellers believe their homes aren’t moving because buyers haven’t viewed them in person or do not want to make offers right now, not because the asking price is too high.

Redfin Corp. said its measure of home-buying demand was down 15% in the week ended April 26, while total listings of homes for sale have hit a five-year low and the median listing price was up 1% from last year at $308,000.

While many economists expect home sales to tumble this year, many forecasts call for prices to climb slightly or hold flat. A new forecast from CoreLogic predicts that nationwide home prices will rise 0.5% between March 2020 and March 2021.

CoreLogic forecast annual price declines in some cities including Houston, Miami, and Las Vegas. It is unclear if mortgage-forbearance policies will prevent a wave of distressed sales.

“In the next 12 months it’s hard to anticipate price declines because of the mortgage forbearance in place,” said NAR chief economist Lawrence Yun. “You would have to see continuing job losses for a prolonged period leading to foreclosures and even then we may not have oversupply.”

Source: Wall Street Journal (05/05/20) Friedman, Nicole

© Copyright 2019 INFORMATION, INC. Bethesda, MD (301) 215-4688

Fed Takes a Number of Major Actions to Boost Economy

FEDThe changes will encourage more money lending to boost the economy. It also announced a new “Main Street Business Lending Program” to help small businesses.

WASHINGTON (AP) – The Federal Reserve took several aggressive steps Monday to support an economy ravaged by the effects of the coronavirus.

The amount of money involved is huge and the Fed’s ambitions are vast: It wants to make loans available to companies and governments so they can pay bills and potentially avoid layoffs. It also committed to buy as much government debt and mortgage-backed securities it deems necessary to ensure those markets will function.

Here are some questions and answers about the Fed’s actions:

What is the Fed trying to do here?

Fed chair Jerome Powell and other Fed policymakers know that many of their conventional tools, such as interest rate cuts, will only have a limited impact given the unprecedented nature of the current economic standstill. Cheaper credit won’t make people seek loans when they are staying at home.

But they are focused on keeping financial markets operating because, otherwise, companies large and small won’t be able to get loans to help tide them over until the crisis ends. That would force even more layoffs and business shutdowns and make the economic consequences of the viral outbreak even worse.

“Keeping the financial plumbing in order makes it easier for corporations to get credit, and therefore keep paying their bills, including payroll,” said Ernie Tedeschi, policy economist at Evercore ISI, an investment adviser.

Is the Fed providing loans directly to companies?

For larger firms, yes. The Fed said that it would lend directly to higher-rated large companies, without providing many details, though it excluded companies that directly benefit from government aid, such as airlines. The Fed also says it will purchase corporate debt, which means large companies can borrow more money by issuing new bonds, now that there is someone who will buy them. Since the viral outbreak spread earlier this month, few if any companies have been able to sell new bonds.

Last week, the Fed also said it would buy short-term corporate IOUs, known as commercial paper, that large companies also use to meet payrolls. The Fed is legally barred from lending to businesses and households, but in emergencies can act through separate legal entities that it sets up. The Fed capped its bond purchases and loans at $200 billion.

What about small businesses and consumers?

The Fed made some key moves for them as well. It has revived a program from the financial crisis in 2008 that will buy what’s called “asset-backed securities.” Those are simply multiple loans bundled together and sold as bonds. Buying the bonds will give banks cash to make loans to consumers.

The Fed will buy bonds that are backed by auto loans, credit card loans, student loans, and some small business loans guaranteed by the Small Business Administration. Many of those lending markets have frozen up because no one will buy those securities, so the Fed’s move should get lending flowing to consumers and some small companies again. This facility will be more important when the virus-induced shutdown starts to ease and people venture out to buy cars and other large goods. This program is also capped at $100 billion, for now.

It doesn’t sound like much for small businesses

Well, the Fed also announced Monday that it would soon set up the “Main Street Business Lending Program,” but it did not provide much information about the timing. Joe Brusuelas, chief economist at RSM, predicts that it will offer a very low interest rate, such as 2.25%, over five years with quarterly payments. This program would work with the rescue package that is currently under consideration by Congress. That legislation includes $425 billion to fund Fed lending efforts like the Main Street program. Michael Feroli, an economist at JPMorgan Chase, said that amount of money from Congress could support up to $4 trillion of lending by the Fed.

How much is the Fed spending on bonds?

The central bank essentially said Monday that there is no limit to what it will buy. For now, the New York Federal Reserve – which conducts the Fed’s purchases on Wall Street – says it will buy $325 billion in Treasury bonds and $250 billion in mortgage-backed securities just this week. For context, that is a far faster pace than the bond purchases it conducted from 2008-2014, when it bought trillions in bonds to keep interest rates low. In the third round of those purchases, from 2012 through 2014, it purchased just $45 billion a month of Treasuries.

Why are they buying so much?

The purchases are mostly intended to pump cash into the financial system. With companies and state and local governments facing plunging revenues from customers and taxpayers, they are trying to borrow much more.

The intensifying need for dollars means that banks and other investors are seeking to rapidly unload Treasuries, short-term corporate debt, municipal bonds and other securities. The Fed’s move to intervene as a buyer of last resort is intended to supply that needed cash.

The Treasury market is also key because the yields on Treasury notes influence a host of other borrowing costs, including for mortgages and credit cards. If investors have trouble selling Treasurys, that pushes up the interest rate on those securities, which then makes borrowing more expensive across the economy. The Fed’s purchases help keep Treasury rates low.

Where is the Fed getting the money for all this lending and purchasing?

The Fed, like all central banks, can simply create it, or as it was called in pre-digital days, “print money.” But since the Fed, like all banks, tries to avoid losing money on loans, the Treasury Department is providing it with $30 billion in cash to cover losses of up to 10% on the $300 billion in lending they announced Monday. The $30 billion is the only money – for now – that comes from taxpayers.

Is all this money creation going to spur inflation?

Probably not. There have been a whole host of forces holding down inflation in the world’s advanced economies, including online shopping, which makes it harder for stores to raise prices because shoppers can easily find cheaper alternatives. The availability of cheaper items from overseas and an aging population that buys fewer cars, homes and other goods also have kept prices in check. Before the virus, the Fed’s biggest problem was that it couldn’t get inflation to even reach its target of 2%, according to its preferred measure.

“For inflation to pick up we would need to see economic activity rebound very sharply,” Feroli said. “While the Fed’s actions may help limit the financial damage from the current health crisis, they are unlikely to generate an overly-vigorous recovery.”

Some economists worried that the Fed’s asset purchases after the 2008-09 recession would set off inflation, but they turned out to be incorrect.

How will this affect our national debt?

The Fed’s actions won’t make much difference. The $30 billion that the Treasury is contributing is the only taxpayer money involved. However, the $2 trillion economic rescue package being negotiated by Congress? That will send this year’s deficit skyrocketing.

Copyright 2020 The Associated Press, Christopher Rugaber. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

Mortgage Rates Climb Again this Week to 3.65%

It’s supply vs. demand: The supply of mortgage money went up but demand from refinancing homeowners went up more. However, that’s generally expected to change.

WASHINGTON (AP) – U.S. long-term mortgage rates climbed this week in a whip-sawing market amid deepening anxiety over devastation to the economy from the coronavirus pandemic.rates

Home loan rates had hit all-time lows two weeks ago. Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year loan jumped to 3.65% this week from 3.36% last week.

Freddie Mac said the short-term rise was due to mortgage lenders increasing prices to deal with booming demand for refinancing into loans at historically low rates.

The average rate on the 15-year fixed-rate mortgage rose to 3.06% from 2.77%.

The recent decline trend in mortgage rates has been driven by investors shifting money out of the stock market and into the safety of U.S. Treasurys as the crisis in confidence around the global viral outbreak has worsened. Long-term mortgage rates tend to track the yields on the 10-year Treasury note, so they typically fall in tandem.

Financial markets have shuddered amid a cascade of cancellations and shutdowns across the globe due to the COVID-19 virus. Wide swaths of the U.S. economy have ground closer to a standstill as authorities ask Americans to stay home to slow the spread of the virus.

After weeks of stunning losses, U.S. stock prices see-sawed between gains and losses on Wall Street Thursday. Investors are weighing the growing likelihood of a recession against the massive, emergency efforts by the Trump White House, Congress and other authorities around the world to shore up economies.

The record low mortgage rates have been a boon to potential homebuyers, and they give many homeowners an opening to refinance into lower-rate loans to free up money to spend or save.

But prospective buyers may be reticent to shop for homes amid the coronavirus outbreak, seeking to avoid social contact, experts note. That could slow home sales. And ultra-low mortgage rates aren’t likely to produce a significant rise in home sales this year because the supply of homes for sale remains at historic lows.

Each week, Freddie Mac surveys lenders to compile its national mortgage rate figures. The average doesn’t include extra fees, known as points, which most borrowers must pay to obtain the lowest rates.

The average rate for a five-year adjustable-rate mortgage jumped this week to 3.11% from 3.01% last week.

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Fed Surprise Move Cuts Interest Rates by 50 Basis Points

The benchmark rate cut is the result of market fears over the COVID-19 virus. It should lower adjustable-loan rates and could indirectly push fixed rates lower.rates image

WASHINGTON – The United States’ Federal Reserve on Tuesday voted to cut its benchmark interest rate by 50 basis points to a target range of 1% to 1.25%, a move that was made at an emergency meeting and aimed at jolting the economy amid the worldwide spread of the novel coronavirus.
The Fed made that surprise decision following a conference call Tuesday involving central bankers and finance ministers in the G7 group of advanced industrialized countries. The participants in the meeting reaffirmed their commitment to using all appropriate tools to confront the financial risks associated with COVID-19.
It marks the first time since the 2008-2009 global recession that the Federal Open Market Committee (FOMC), the Federal Reserve’s policy-making body, has cut its key federal-funds rate in between policy meetings.
“The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity,” the FOMC said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to 1-1/4%.”
Fed Chairman Jerome Powell and the nine other voting members of the committee, which last met in late January and had not been scheduled to meet again until March 17-18, unanimously backed the policy action.
U.S. President Donald Trump, who has frequently slammed the Fed for not lowering interest rates more sharply, tweeted early Tuesday that the central bank was failing to take the same decisive action that is being seen in other countries.
“Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so,” the president wrote.

“Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”
There are more than 100 confirmed cases of COVID-19 in the US and the disease has been blamed for six deaths in Washington state, according to the Centers for Disease Control and Prevention.

© 2020 EFE News Services (U.S.) Inc.

Fla. House Moves Forward on Vacation Rental Bill

vacatrentaThe effort to bring short-term rentals under state control could help ensure that advertised rentals on sites like Airbnb are licensed and collect and remit taxes.

TALLAHASSEE, Fla. – For the first time, online platforms such as Airbnb would have to collect and remit taxes on vacation rental properties, ensure that only properly licensed rentals are advertised and provide the state with specific information about the rentals, under a proposal headed to the House floor.

In exchange, short-term rental regulation would be “pre-empted” to the state, largely preventing local governments from regulating vacation rentals. Local governments could only regulate the rentals in the same way as other properties in neighborhoods, a restriction that cities and counties oppose.

The House Commerce Committee on Thursday approved the proposal (HB 1011), with Democrats objecting that decisions about vacation rentals – which have sparked backlash from some homeowners who complain about raucous parties, parking issues and a steady stream of strangers in neighborhoods – are best left up to local officials.

Despite the objections of local government officials, House and Senate leaders brought together a host of affected parties, including Realtors®, hotel operators and advertising platforms, to strike a deal that has eluded the Legislature for years.

“This feels like groundhog day,” Florida Association of Counties legislative director Eric Poole told the committee before Thursday’s vote. Florida already has “a very broad and very deep pre-emption on vacation rentals,” he said.

Poole cited one report that found the vacation-rental industry generated $1.2 billion in revenue through rentals to 6.6 million guests in Florida last year. The numbers demonstrate that “the local and state regulatory environment remains friendly to short-term rentals” and that local regulations have “helped the industry flourish,” he added. “We are not stifling commerce. We are pro-vacation rentals. We just would like to have a little bit of home rule authority to address some of the local needs,” Poole said.

Under current law, cities and counties cannot prohibit vacation rentals, or regulate the duration or frequency of the rentals. But local governments are allowed to license and inspect properties.

While the proposed changes would ban ordinances that specifically target vacation rentals, cities and counties would still be allowed to pass ordinances dealing with noise, parking and trash, so long as they apply to all residential properties, the bill’s supporters stressed Thursday.

Much of the debate on the proposal focused on the property rights of people and businesses that own the vacation rentals and the property rights of neighboring homeowners.

“Everybody who owns their property has rights to the property that they purchased,” Rep. Byron Donalds, R-Naples, said. “This debate comes not from the use of property but the nuisance that results from the use of the property.”

Donalds said there aren’t enough hotel beds to accommodate all of the visitors to Naples. The vacation-rental industry “has been a boon to Southwest Florida,” he said.

But Rep. Javier Fernández, D-South Miami, said that, while he was “heartened” by some of the provisions in the measure, he still had concerns. For example, the proposal would carve out condominium and homeowner associations, but not “single-family neighborhoods.”

“Those owners have property-rights expectations related to their quiet enjoyment of their own property,” Fernández said.

But bill sponsor Jason Fischer, R-Jacksonville, said the bill “doesn’t prevent local governments from dealing with issues,” such as “the party house” and noise issues.

“Nothing in this bill encourages the situation of a party house. Nothing in here would stop local governments from passing, I don’t know, noise ordinances and enforcing those noise ordinances,” Fischer said. “Make no mistake, this bill doesn’t do anything to change the power of local governments when it comes to dealing with good-neighbor policies that affect the neighborhood.

Fischer said the measure was based on “common-sense” feedback from numerous “stakeholders.”

The House plan is now headed to the floor for a vote. A Senate version (SB 1128), sponsored by Sen. Manny Diaz Jr., R-Hialeah, needs to clear one more committee before a full vote in the Senate.

The Florida Restaurant & Lodging Association has opposed vacation-rental legislation in the past, but Carol Dover, the group’s president and chief executive officer, told The News Service of Florida on Thursday that she’s backing the proposals.

Dover praised House and Senate leaders for their work on the effort this year. While the measure does not address all of the association’s concerns about vacation rentals, she said she supports “the middle ground that’s been struck” with the proposal.

“It’s not perfect, but it’s a huge leap in the right direction,” Dover said.

Source: News Service of Florida, Dara Kam