Phil Castle, The Business Times

Jon Maraschin has straightforward advice for business owners and managers considering whether or not to apply for federal loans intended to offer financial relief in the midst of the coronavirus outbreak.

“If you’re in business and need the money, apply,” says Maraschin, executive director of the Business Incubator Center in Grand Junction.

The details of the loan programs — along with regulatory and technical glitches — were being worked out even as local banks began processing applications.

While the programs offer grants as well as forgiveness in repaying some portions of loans, they’re not suitable for every business.

And Maraschin is just as straightforward in his advice about taking on unnecessary debt. “If you don’t need the money, don’t borrow it.”

Maraschin was among those who offered overviews of available financial assistance in a webinar presented by the chambers of commerce in Grand Junction, Fruita and Palisade. Vance Wagner, regional president of ANB Bank, also participated, as did Clay Tufly, regional president of Alpine Bank.

Two lending programs are available to small businesses enduring the effects of the coronavirus outbreak, say Maraschin, Wagner and Tufly.

The Paycheck Protection Program offers loans of up to 2.5 months of payroll for a business. The program also is available for sole proprietors, independent contractors and self-employed. The Coronavirus Aid, Relief and Economic Security Act set aside $349 billion for the program.

Wagner says 75 percent of the proceeds from the loans must be used for payroll, while the remaining 25 percent may be used for such other expenses as rent, utilities or interest on mortgages.

Repayment on the portion of the loan used for payrolls will be forgiven if staffing levels as measured by the number of full-time equivalent positions at the time of application remains the same on June 30, Wagner says. Otherwise, that money must be repaid.

The U.S. Small Business Administration also offers economic injury disaster loans of up to $2 million. Those loans can be used for payroll as well as accounts payable, fixed debts and other expenses that can’t be paid because of the coronavirus outbreak.

Applicants for the disaster loans also may apply for $10,000 grants that don’t require repayment, Maraschin says. Even those that don’t qualify for loans still could receive the grants, he says.

There’s no double dipping, though, in using both the Paycheck Protection Program and disaster loans for payroll, he says.

In addition, the Mesa County Revolving Loan Fund provides up to $25,000 in loans for working capital, equipment or inventory for companies responding to the coronavirus outbreak, Maraschin says.

Business owners and managers considering applying for a paycheck protection loan, emergency disaster loan or both should work with their banks to do so, Maraschin says. “Go to the banker you know and who knows you.”

Assistance also is available from other sources, including coaches with the Small Business Development Center in Grand Junction, he says.

All the details of the process haven’t yet been worked out, however, Wagner and Tufly say.

“This is a very fluid situation,” Wagner says. “There are still a lot of unanswered questions.”

There have been regulatory and technical glitches that have slowed loan processing.

Given their likely popularity, there’s a chance the funding allocated for the programs will be exhausted. But Tufly says if that happens, there’s also a good chance additional funding will be allocated.

More information about the Paycheck Protection and Economic Injury Disaster loan programs is available from a number of sources:

The U.S. Small Business Administration website is located at www.sba.gov.

Coaches at the Small Business Development Center in Grand Junction are available for free telephone and video consultations. Call 243-5242 or email frontdesk@gjincubator.org to register.

The Colorado Office for Economic Development and International Trade has set up an online business resource center at https://choosecolorado.com.