Wondering how and when to pay back an Economic Injury Disaster Loan (EIDL)? You’re not alone.
Administered by the federal government’s Small Business Administration, EIDLs were part of a relief package Congress passed to help small businesses and the self-employed experiencing temporary losses in revenue due to COVID-19. The EIDL is different from the Paycheck Protection Program, or PPP.
The loan is a 30-year loan at a 3.75 percent interest rate (2.75 percent for nonprofits), with payments deferred for a year (though interest still accrues). Many businesses also received an EIDL grant of up to $10,000, which was forgivable.
Although the SBA hasn’t sent statements or payment stubs yet, you can still start paying the loan off, and there’s no prepayment penalty if you decide to pay in full.
You can find your balance and current payoff status by registering with the SBA’s Capital Access Financial System (CAFS) at https://caweb.sba.gov/cls. You’ll need your SBA loan number, found in your closing documents.
Start by clicking “Not enrolled” under the SBA Account Login heading in the left-hand column on the home page and then choose “Borrower” for user type. Most of the form is self-explanatory, though here’s one hint: When entering your phone number, the country code for the United States is “1.”
After successfully registering, log back in and find your loan by clicking “Borrower Search” on the blue bar at the top of the page. The loan information page will show your loan number and status, the principal balance, and the payoff balance, among other info. It also shows you when your next installment is due and for how much, and how much interest the loan has accrued.
This page also includes a link to pay.gov, where you’ll make payments. This is a much simpler form than at CAFS–you’ll need your SBA loan number again, along with bank account information.
Wondering how and when to pay back an Economic Injury Disaster Loan (EIDL)? You’re not alone.
Our experiences inside grocery and retail stores and restaurants have changed dramatically over the past few months, with many changes likely permanent–plexiglass dividers at checkout and contactless purchases, for example.
But what about the office? What will it look like after the quarantines ease and more workers return to the office after months of remote work?
Touchless technology and air purification systems will likely be the norm, along with separate entrances and exits. A number of design and architectural websites suggest that buttons and handles will be replaced by innovations like foot-activated call buttons for elevators and methods of entering and exiting office restrooms that don’t include handles.
Desks will be spaced farther apart and may feature sneeze guards, and offices may install more motion sensors to turn on lights and faucets. Going even further, companies might rotate staff schedules.
According to Forbes, a hub-and-spoke office model may become more common–a company’s headquarters serves as the “hub,” while the “spokes” are used for smaller teams and are in a variety of geographic locations. The hub is no longer the base where everyone shows up each day.
Other ideas include the elimination of a single office refrigerator in favor of smaller fridges by department, and grab-and-go meals in cafeterias for the foreseeable future instead of self-service hot bars. Self-cleaning surfaces are likely to become the norm as well.
If you live in Oregon, Washington or California, you may no longer be able to get insurance to cover damage from wildfires. Insurance losses from recent wildfires are adding up to be some of the largest on record.
Insurers are moving to raise rates and refuse policy renewals in regions with high fire risk, according to Moody’s Investor Service.
As of late July, losses from wildfires in the western U.S. were estimated to be $8 billion, the third highest on record. However, no one knows how high the total will go, according to Moody’s.
That number is just more pain piled on insurance losses as flash floods, tornados and hail caused another $20 billion in insured losses from natural disasters in 2020.
But that isn’t the full total for storm-related costs. The $20 billion number was calculated before hurricanes.
Analysts project that Hurricane Laura caused $9 billion in insured losses; Isaias caused about $4 billion in insured damage and Hanna caused about $250 million.
Small business owners are finding their insurance policies have limits on the payouts for demolition of buildings torched in riots.
A report by the Minneapolis Star Tribune showed that most insurance payouts for demolition cover about $25,000 to $50,000 in costs. Meanwhile, contractors in the area have submitted bids ranging from $200,000 to $300,000 for the work.
Small business owners should check their policies for limits on demolition. Depending on the policy, insurance could pay from $25,000 up to $250,000.
Total damages for riots could exceed $2 billion, according to a Bloomberg News insurance analyst. In Minnesota alone, insurers expect gross losses of $254.6 million. In Minnesota, 1,612 claims have been received, but insurers expect that number to rise to at least 1,714.
According to the Star Tribune, it often costs more to demolish buildings than the property is actually worth.
After Minnesota’s riots, cities have hired demolition crews to take down structures that were dangerous, presenting the property owners with bills totaling hundreds of thousands of dollars to haul away debris.
With most major insurers suffering losses in the millions now and with more riots expected, commercial property insurance premiums are rising, sometimes doubling. In other areas, carriers won’t write policies at all.
In the thousands of little decisions we make every day, the costs are probably minimal. The difference in cost between taking a bologna sandwich or a turkey sandwich to work for lunch is trivial.
But the difference between a bologna sandwich for lunch and a lunch at a pricey restaurant starts to get our attention.
This is what economists call an opportunity cost.
The bologna sandwich costs a little more than a buck. The lunch at Swells Restaurant costs $40. That choice – the opportunity cost — is $39.
We could even think of the opportunity cost as much higher.
If we buy a $40 lunch every day during a 260-day work year, we would spend $10,400. If we brought a $1 sandwich to work, we would spend about $260. The opportunity cost is $10,140.
You could say that we had the opportunity to do something else with that $10,140 but instead, we bought lunch at Swells.
For some, buying lunch at Swells would be a low opportunity cost if they were negotiating million-dollar contracts at lunch.
For others, this would be a wildly inappropriate way to spend their money. That $10K could be the difference between an emergency savings account or an investment in an IRA for retirement. But one thing is for sure: The money can’t be in two places at once.
Opportunity costs can be dramatic when you look at big ticket items like cars and mortgages, or in savings and investment.
Suppose we did take that bologna sandwich to work every day for a year and banked the $39 per day. We’ll round up our savings to $10,000 for this example.
Now we have a choice. We can keep our $10K in a regular savings account at an interest rate of .01 percent. We won’t make any money, but we have the advantage of having the money handy for emergencies. On the other hand, we could invest the money in an IRA and expect a return of 5 percent or 10,500. Over 30 years, that would accumulate a balance of close to $50,000.
So, we could say that lunch every day for a year at Swells cost $40,000.
Life comes at you fast. In your youth at the peak of your health, in middle age, at the height of responsibility, what if an accident or illness took you off the family map? We all know it can happen and few think it will.
As a matter of fact, about 40 percent of people have no life insurance at all. Of the people with life insurance, about half are underinsured.
But the cold fact remains: What happens to your family if you die? Will they be able to afford the house? How will their lifestyle change? Who will support the family? How will they support the family?
Life insurance answers many of those questions — and it answers them affordably.
The least expensive form of life insurance — term insurance — is very inexpensive. A healthy 30-year-old can get $250,000 of insurance for about $15 per month. The earlier you buy term insurance, the less expensive it is and many policies don’t even require a health check.
Many people have life coverage at work, but this should be reviewed because it may not be enough. Primary breadwinners should have coverage equal to six to 10 times their annual incomes. Term policies usually cover only your working life.
Whole life is another kind of life insurance. Unlike term policies, it covers you for life, as long as you make payments. It also has the benefit of building cash value. Although most experts say it shouldn’t be considered an investment, if you get a big policy at a young enough age, and keep it until retirement, you could have a nice nest egg to tap into at retirement. Whole life policies can also be cashed in by your Power of Attorney for some part of the face value if you enter a nursing home, for example. It could be considered a small inheritance. Whole life policies usually require a medical exam and are unlikely to cover smokers.
Many websites compare costs of life insurance options.
Let’s hope that no one looks back at 2020 and thinks: Those were the good old days. That implies there are going to be worse days.
Still, as bad as 2020 has been, there were countless really bad years in recorded history. There have been so many bad years, how do we really choose? If we choose death as a yardstick, we really should narrow that down. Do you want death by war, disease, bad policy, starvation, drought, or what? Or maybe we choose sheer brutality. Tons of choices there. Or, how about choices that seemed okay at the time, but had long-lasting terrible ramifications? Maybe, natural disasters?
Here are four really bad years plucked out of history for their general awfulness:
- Disease and Natural Disaster Award: 1300s. In 1315, Europe’s warm period of prosperity ended with a bang. Possibly because of volcanic activity, winters became brutal and summers cold and rainy. Crops failed. About 80 percent of animals died of infections. Famine took hold. Life expectancy was about 29 years. Cannibalism, infanticide, and mass starvation were characteristics of a 60-year period in that century. As for disease, 1348 was a banner year. The terrifying black death visited not just on struggling Europe, but also the world. In 18 months, up to 200 million people worldwide died. Bodies were unburied in the streets where animals tore them apart. Survivors lived in fear, stench, and desperation with no understanding of the Plague and no way to fight it.
- Political Chaos, Disease, Social Unrest Award: 1919. In the economy, inflation and unemployment skyrocketed after World War I. Influenza killed 500,000 Americans. The bloody summer of 1919 was filled with race riots, with 500 wounded and 38 dead in five days of violence in Chicago. Across the country, 76 black Americans were lynched. A million workers went on strike, affecting the steel and coal industries, and even the Boston police force. Bombs were mailed to federal officials and fear gripped the nation.
- Dashing of Hope Award: 1968. Mass demonstrations for civil rights both buoyed and frightened Americans. A sense of positive change was in the air. But the worst moments were yet to come: The assassinations of Martin Luther King, Jr., and Robert Kennedy. The riots at the Democratic National Convention in August shook the nation.
- Cruelty Award: 1943. In Germany, systematic deportation of Jews to extermination camps was well underway. Everyone knew about it. No one stopped it. In the U.S., 240 instances of interracial battles in cities and military bases terrorized communities. But, according to historian Matt Delmont, public awareness of atrocities did not prevent them from continuing.
It’s a scenario that has happened all over the country.
The owner of a small restaurant or boutique just gets the store ready after the long coronavirus quarantine and then, a riot. Windows smashed. Building vandalized. The entire inventory ransacked and stolen.
Were they finished for good?
For the insured, there was good news in May and June and for those whose enterprises were not hit, there were lessons learned.
A standard Business Owners Policy typically covers fire, riots, civil commotion or vandalism. Plate glass insurance can be purchased separately. The key is whether the insurance was sufficient to cover all losses, including inventory and equipment. According to the Insurance Information Institute, some small business owners, cutting costs after the virus quarantine left them without income, may have discontinued insurance policies.
Income Interruption Insurance
Business Interruption Insurance pays for loss of income when businesses are forced to close because of rioting or some physical damage to the premises. However, according to the Institute, only about 40 percent of small businesses have this coverage.
Businesses have to document their income and expected loss from the looting. If a business was closed due to the virus outbreak, and then was looted, most insurers will assess the loss based on a 12-month income picture, according to the Claims Journal.
Outlook for Business Insurance
Property losses were still ongoing, but with rioting taking its toll on cities across the country, insurers were estimating losses to be the biggest in U.S. history, the Claims Journal reported in June.
For the insurance industry, the timing of the riots is especially difficult since the Atlantic hurricane season began in June. Hurricane and flood claims are extremely high.
Most observers expected insurance premiums to rise overall while the industry limits coverage. Insurers are likely to stop writing policies that cover looting and rioting.
InsureUS offers commercial insurance in Cypress, TX. Most business owners find that they need some type of commercial insurance. Like personal insurance, there are a wide range of types of commercial insurance and coverage options.
Business Property Insurance
If you own a physical business, including a retail store, manufacturing center, or office, you’ll need commercial property insurance. Business property insurance ensures the property itself against damage including fire and vandalism. It covers the structure and your business inventory and equipment.
Most businesses need some form of liability insurance. If you own a physical business, you’ll need liability in case someone is injured on your property. Many businesses choose liability in case their products or service fail and cause expenses to the customer.
If you are temporarily unable to operate, you’ll experience a loss of income. Business income covers many situations where you can’t generate income. Many expenses remain when you can’t operate, like lease costs. Business income insurance can help keep you afloat while you ride out the storm.
If you have employees, you’ll need worker’s compensation insurance. It’s not a legal requirement in Texas, making it the only state in America that doesn’t require worker’s compensation for some businesses. However, worker’s compensation is still a smart idea. If someone gets injured on the job, worker’s compensation will cover their lost wages and medical bills. Without it, you would be liable for those expenses.
InsureUS knows that you’ve worked hard to make your business successful. Unforeseen disasters of all types can spell the end of your business if you aren’t properly prepared and insured. If you live in Cypress, TX, let us help you protect your business with the right insurance policies for your needs.
From ride sharing to delivering food and goods, transportation-based businesses have seen a surge in popularity around Cypress, TX. Putting your personal vehicle to run your own business can be a smart choice to earn income in an ever-changing convenience service industry. InsureUS knows one of the most important considerations to make when you start such a business is auto insurance coverage.
Even if your personal vehicle already has insurance, that policy is likely not adequate for commercial use. In fact, accidents that occur while you are using the vehicle for business might not be covered at all by your personal use policy. So, how can you decide if you need a commercial auto insurance policy?
Personal VS Business Usage
A vehicle is considered to be used commercially when a business requires it in order to maintain normal operations and/or it is used over 500 miles per week. How you use your vehicle also matters in determining if it is mostly personal or commercial.
- Commercial Examples – Regularly visiting clients or business properties, Hauling equipment to work sites, Delivering goods or paying customers, Selling goods or services out of the vehicle (i.e. a food truck or traveling cleaning service)
- Personal Examples – Regular commutes to work, Taking non-work trips with coworkers, Picking up lunch, Business use less than 3 times per month
Unique Opportunities, And Dangers
Using your vehicle to generate income can be exciting, but it can generate problems, too. Your vehicle will likely deteriorate in condition faster and is far more likely to encounter dangerous weather and accidents. These situations are just some reasons why commercial auto insurance offers special coverage for business vehicles.
Whether you’re using your personal vehicle to run your business or own a whole fleet of work cars and trucks, InsureUS encourages all of our Cypress, TX customers to reach out and discuss commercial auto insurance with us today.