The Delaware Division of Small Business has modified the state’s H.E.L.P. program after restaurant owners struggled to qualify for the program.
Among the changes is raising the annual sales limit from $2.5 million to $15 million. The restaurant industry had pressed for the changes.
“Unfortunately, one of the key industries the H.E.L.P. program was created for, the restaurant industry, has had difficulty accessing that program due to structural difficulties in their typical business models. Because of this, the Division of Small Business is moving to modify the H.E.L.P. program for these businesses in order to react to this and preserve as many Delaware small businesses as possible,” a release stated.
Loan activity under the H.E.LP. program has been lower than forecast.
By contrast, the federal Paycheck Protection Program quickly ran out of its $349 billion in funding. The program offers forgivable loans based on employees retaining staff.
“The idea was that H.E.L.P. loans would provide funding for some that may be unable to access that support or may not be able to wait for it to be made available to them. Primarily, it was assumed that these would be the smallest businesses in our community,” the division noted.
Qualifying business” refers to businesses with a first four-digit NAICS code of 7225 (restaurants). The $2.5 million sales ceiling remains for all other businesses covered that qualify under the H.E.L.) act.
Layoffs were high in the industry as emergency orders led to restaurants being limited to carryout business that generate a fraction of normal revenues. The revenue ceiling also excluded many restaurants that had larger staffs. or more than one location
The changes are as follows:
- The revenue limit for a qualifying business in this category is lifted to $15 million.
- Qualifying businesses in this category can apply for monthly loans of up to $10,000 to cover a range of fixed expenses.
- If a qualifying business’ total mortgage or lease payments in a month (across a single location or multiple) exceed $10,000, they are eligible to apply for a loan of up to $50,000 per month to cover those two expenses.
- The eligibility requirements remain the same even for these expanded loans – an applicant must show that they paid their lease or mortgage for at least 10/12 months prior to making a first application for assistance. An application must include proof that this requirement is met to be approved. A letter from a landlord or bank on the organization’s letterhead certifying this is sufficient for these purposes.
- Applicants must submit a calendar year 2019 Balance Sheet and Income Statement (P&L) in order to certify eligibility.
- The terms of all H.E.L.P. loans remain unchanged: 9 months of no payments, 10-year repayment schedule thereafter, 0% interest (monthly payments per $10,000 borrowed are equal to approximately $85/month).