SBA Funding with Nav's Gerri Detweiler

0:00
Welcome to The Thoughtful Entrepreneur Show. I'm Josh Elledge, Founder and CEO of UpMyInfluence.com. We turn entrepreneurs into media celebrities, grow their authority, and help them build partnerships with top influencers. We believe that every person has a unique message that can positively impact the world. stick around to the end of the show.

And with us right now, I've got my good friend Gerri Detweiler. Gerri, thank you so much for joining us, Gerri, you do great work with Nav. And Nav is a brand that I've worked with before I use it. It's a fantastic service. I actually had the opportunity to even visit the corporate headquarters and spend some time over there. And we'll kind of talk just real briefly about what nowadays Really what you and I, I'm very excited to chat about is what's currently going on with the resources. And again, when we're recording this, the House and the Senate have have kind of passed the bill or is it? It's through the Senate Senate, it was unanimous. And so just bear with us, if you're listening to this, and like, wait a minute, they change something. We don't know that at this point of when we're recording this. But we are going to talk about what we definitely do know. And the opportunity there are for business owners right now. If you have in any way been affected by Covid 19. Gerri, thank you so much for joining us.

1:39
Oh, thank you, Josh. And and I'm glad you got to see our offices, we did move but then we had to all go remote. So yeah, you'll have to come back and see the new offices, right. This is past

1:51
Nav has been going through a lot of growth. And so now just by the way, you can kind of follow along with us if you're like now what do they keep saying now? COMM is a great brand. It's focused on reducing the churn rate of businesses by making sure that you're just doing really, really smart things with what I consider business adulting. And you know, you have access to capital, you have access to lots of different resources as well. But Gerri, I'll let you kind of describe it. That's kind of my own experience with it. All I can tell you is that because of my relationship with Nav, we were able to ultimately secure some great lines of credit that we built when times are good. And as well, we were also able to ultimately get SBA funding, which was wonderful for us because that really allowed us to grow and scale to a new level because we had access to be able to invest into those growth opportunities.

3:40
Now, alright, so Gerri, thank you so much. And by the way, Nav has some wonderful resources about what we're going to talk about, can you kind of share what Nav is doing to help businesses who would like to take advantage of what the SBA and other agencies have been doing?

3:58
Yeah, so two things first, Don't think our editorial team has worked as hard as they have in such a short period of time as these past two weeks. We're trying to keep up with all the programs and the opportunities and the things that are there to help small business owners. So we have a bunch of articles. We if you go to the nav.com slash blog, so just nav dot com slash blog, you'll see our articles where we have all 50 state resources that are out there, we're keeping that updated the stimulus bill, we're keeping that updated economic disaster loans, which we'll talk about in just a minute. So there's a whole bunch of information there. And then second of all, we do have a phone team that's there if you're trying to find what financing is available. You know, when this bill gets passed, and they open up these new SBA loans, we're going to be working to match borrowers with the right SBA loan partner. So please, you know, don't hesitate you sign up for free nav.com completely free and then reach out to our credit lending team and they'll be happy to talk with you

5:01
Yes. All right, we get a little bit of a delay here in Well, well, Gerri is kind of Gerri's back. Okay, good. You're rebuffering there for a moment. You know, what I wanted to share was, you know, it is really nice on this, you know, as as being in business, it's really nice being able to have access to experts who are on your side that are going to give you unbiased information. And so it's like having access to, you know, a suite of, of credit, or business credit experts who can help you navigate that world because I'll tell you, in my experience, you know, as a consumer experts, consumer advocate, I'll tell you that there's a lot of pitfalls out there. So I think you know, what, what I would encourage everybody to do is listen to our conversation would be to avoid direct mail, from maybe lenders that are a little bit more predatory in nature and unfortunately going to hit With a super, super high interest rate, I would almost I would almost hope that, you know, my in my world that government agencies would kind of take action to restrict some of the really nefarious practices, especially right now when businesses are hurting, but unfortunately, you know that they are they're absolutely at it with all the junk mail, all the direct telephone solicitations. And Jerry, just really quick. Do you mind pointing out the that, you know, some of the alternative lenders, some of the cash with it and not the factoring folks, but there's some there's some really bad things out there that you want to avoid. And that's why you want to make sure you have friends with you know, someone like NAB who can kind of help you say, Oh, no, no, no, no, no, don't, don't do that deal. You can get much better credit, much, much better access to resources in that.

6:55
Yeah, and we do have a range of lenders. So there are some that are going to be more expensive. If you Do you, for example, have bad credit, you haven't been in business long, you don't have enough revenues, you may not have other options. So we're going to point those out. But Josh, one thing you brought up is really, really, really important. And that is that in business lending, they don't have to tell you an APR. So they can state the interest rate in ways that are very confusing. It could be a factor rate, you know, it could be I mean, there's all kinds of terminology. And often the business owner doesn't realize how expensive is so one of the things we do have on our website for free, you don't have to have a Nav account. If you just Nav dot com slash calculators, there are calculators there that can help you translate the cost into an APR so you can compare it. And there are states that are working on legislation to require an APR for small business lending California, New York and New Jersey. So those are I think that's a great step in first step in the direction, right because then at least you can see, hey, this one's 54% APR, I'm going to look elsewhere. Maybe that's not affordable for my business. And, and you can hopefully find something that's right healing.

8:04
And I know your CEO Levi King has actually done some really good work legislating on behalf of kind of getting more transparency in business lending, which I'm thrilled for. So Gerri, what do we know about the business relief that is coming?

8:23
So let's first talk, Josh, if you don't mind about what's already here, right, so we have the we have the economic injury disaster loans direct for businesses directly impacted by Covid 19. And that could even mean that you do business with a business that is having problems and so you are not getting it doesn't have to mean that you know, you had workers infected or anything like that, it just means your business has been impacted. This is now available in all 50 states. It provides up to $2 million dollars for the borrower and it's designed to cover the expenses that you would have been able to cover had this not occurred. So if you were about to sign a big deal, you know for $150,000 that's not what it's designed to cover. It's designed to keep you in business and things pay it give you working capital to get through this disaster. It's a very low interest rate 3.75% can be amortized up to 30 years 30 years yeah, Nope, nothing great. Yeah, no prepayment penalty. So if you know your business turns around, you want to pay it off, no problem. No fees are involved. And part of this so that's available right now and I'm encouraging business owners to apply now. Many are and in fact, yesterday they had to change the SBA website because it could not handle the volume. Right. So you can go there now we'll put a we'll get get a link to Josh you can share. But what you can do right now is go there, download the forms, and then you upload them on that site to be processed. Now if the stimulus bill pay passes as proposed, they're suggesting a couple of additions that I think are great. Right now, if it's over $25,000, you have to provide collateral which could include your home equity, that's risky for small business owners, right? So they're talking about waiving that collateral were a requirement for a higher loan amount. They're also talking about removing and I think off the top my head, I think it's $200,000. But that's going off my memory there. And then they're also talking about no personal guarantee, and no requirement that you have to be. There's right now there's something called a credit elsewhere tasks where the loan, the person processing loan has to say, hey, this person can't get similar credit elsewhere. They're going to get rid of that because oh, wow, everything's too much in flux right now. Right? You know, lenders are changing daily, right?

10:51
So with the disaster, a disaster relief loan, these are currently still requirements is what you're These are

11:00
currently requirements that they're, they're looking at if the stimulus bill passes, it will adjust the requirements. So we take away the personal guarantee don't require this credit elsewhere test. And the other thing that's been that that is part of that is a $10,000 advance that doesn't have to be repaid. So if that all happens, these are going to be attractive loans. I think they're attractive loans no matter what. And I will tell you, Josh, I'm hearing from a lot of business owners who say I don't want to take on debt, I don't want to loan and I get it, I get it. If you've if you've never borrowed and you bootstrap your business. It's not it's in knowing you're gonna have to go into debt does not feel good, but these are very attractive loans. And I do suspect that we will have additional waves of relief programs, and they could provide some additional relief beyond that's right now there's a deferral on SBA disaster loans where you don't have to make payments for a year. So you This is this is something to at least consider Apply Now, get your place in line. And if you don't end up meeting the money or you don't want it, you just say No thanks. You can take a smaller amount if you're worried about the personal. Let's say the collateral requirement is still there over $25,000. You could just say, I don't want to take more than $25,000. And you can do that. So these won't happen. They won't. They're trying to process all applications within 21 days. But that's extremely ambitious. In my view, this program traditionally has been for, you know, regional disasters, a hurricane a fire or an earthquake. It's not been for a national disaster. So it'll take a little bit of time, but I'm telling business owners to apply. And again, save your spot in line.

12:46
Yeah, no kidding. Now, in addition to this to some states, and I don't know how many are offering bridge loan programs as well, in the state of Florida. It's up to 12 months. Interest deferred or interest free. And then after 12 months, I know in the state of Florida, I think it's 12%. So and these are designed really just to kind of bridge the time. They they're promising to give money a little bit faster than the SBA can do. And so that might be a possibility in your state. Any any insight on that?

13:24
Yes. So there's a handful of states and a handful of cities that are offering these zero percent loans or grants. And we do have a list that we're updating daily on the Nav blog that has all the state programs. So that's another place to look and one thing that you and I know we talked about in the past, Josh is that you can get help and from your local Small Business Development Center, or your score mentor, they are very much involved with this process. SBDC advisors, for example, can help you fill out that disaster loan application. problems. And they do that for free. So don't hesitate to if you've never done it in the past. And if you have then reach out again, but reach out to score and your Small Business Development Center and see what they're doing some of the during office hours, webinars, live chats, they do free mentoring, etc.

14:21
Take advantage of that, you know, I actually emailed my local SBDC this morning, and I have three people that I've worked with in the past and I've done some mentoring through SBDC. But I had three people like I'm here to help. I'm here to help. I'm here to help, like, wow. So there really are some amazing organizations. If you're listening, if you're in business for yourself, you're not alone. You have great people, I would imagine Nav you their organization is distributed, but still able to provide a lot of great services.

14:55
Yes, we still have a whole team on the phone every day talking to small business owners and answering They're questions about financing. And then the team that I work on is working to update these articles and resources. So you have the latest information about what programs are available.

15:10
Yeah. So if I'm at I'm at nav.com, where do I find this resource center?

15:15
You can go just nav.com slash blog, we will be putting up a coven Resource Center. That's not there yet, but you if you scroll down the blog, you're gonna see all these articles. We've got over a dozen there right now. And we continue to add more and then Josh, I should mention, too, that, you know, the, the the proposal that's coming that's going the proposed legislation will expand the SBA, a couple of the SBA loan programs, specifically the SBA seven, a program you're familiar with, right? It's the most popular loan program offered through the SBA. It goes through individual lenders so that disaster loans are made by the SBA. Wow. Seven, eight loans are made by lenders and they're guaranteed by the SBA. And so what they're trying to do with the seven eight program, they're raising the limit on the Express program, which is the sort of the fast track program is what traditionally is $350,000 max for a loan, they're gonna raise that to a million. And then they're going to make improvements to the seven a where they will guarantee the loan 100% to the lender, remove the personal guarantee requirement for many of these loans, which is a big, big deal, right? Because you don't want to find that you can't get back up a business but then you have this huge federal debt that you owe, right you don't you don't want to deal with that. So that's going to be positive. They're going to offer a deferment again for the payments, your interest, and then there is a forgiveness component to where if you keep your workforce largely employed And don't cut their wages too significantly, you can actually have part of that law applied and part of that loan forgiven. Wow. Oh, yeah. So there's going to be a lot of details. We're going to be writing a lot about this next few days. Yeah. But I do want business owners to realize these recent sources are there because, you know, I see loans traditionally have been some of the best small business loans you can get, and these will get even better and hopefully help businesses make it through this really tough time of

17:32
writing. Right. You know, I know that there's been some what's what's your perspective on this? Some people were complaining that there's, in this bill, there's a little bit too much money that's not that's given to businesses, as opposed to directly to consumers and what would you say, Well, this is why this might not be a bad idea in order to make these funds available for businesses like how would you How would you answer that to someone who's kind of confused or initially agitated by that?

18:05
Yeah, I am hearing a lot of frustration from business owners in particular about the fact that they're being told to borrow money during this time. You know, I think we have to help consumers and businesses in this time. So I would never pit one against another. And,

18:19
of course, not every single

18:20
business owner is a consumer. Right. And, and but small businesses employ a lot of our workforce. And if they don't survive, that will ripple through our entire economy. So let's try to do what we can to help these small business owners and I'm actually even going as so far as to tell small business owners to reach out to their legislators and and let them know, you know, what they need, what their responses to what has been proposed. It's I do think justice is probably the first wave of relief. I think there will be more and they need to hear from you. Right the lobbyists are talking to them. You as a consumer and as a small business owner, need to make your voice heard. as well.

19:00
Yeah. Well, Gerri Detweiler, I want to thank you so much for your time today. And again, the resource center that Nav is put together is at nav dot com slash blog. So as of when we're recording this right now, we've got frequently asked questions about applying for SBA disaster loans due to Coronavirus, Covid 19 resources and guidance by state. And so a lot of good things that you guys are doing. Thank you so much. You know, again, as I just say, you know, as a consumer advocate, and as a consumer expert, NAB is one of the good guys out there, in my opinion. And so thank you, Gerri, for all the work that you do to help educate small business owners on the resources that they have available. And, again, help businesses make sure that they're making very smart decisions, know what they have access to help improve their situation so that they can get the most attractive options available for them. And that's again, that's a big part of what Nav does.

19:58
Yeah. And thank you Josh, you know, there's there's so many small business owners struggling we want to help them as much as we can.

20:05
Excellent. Excellent. Gerri, thank you so much.

20:07
Thank you.

20:09
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