Bridge the Gap: Eligibility for Florida’s Small Business Emergency Bridge Loan Program
As a result of Governor DeSantis’ Executive Order 20-52 issued on March 9, 2020 declaring a state of emergency throughout the entire state of Florida due to the COVID-19 pandemic, the Florida Small Business Emergency Bridge Loan Program (the “Bridge Loan Program” or the “Program“) has been activated. $50 million has been allocated to the Program to provide short-term, interest-free loans to Florida businesses economically impacted by the pandemic.
The Bridge Loan Program, which is administered by the Florida Department of Economic Opportunity in partnership with the Florida SBDC Network and Florida First Capital Finance Corporation, is a short-term, interest-free loan program designed to help Florida businesses bridge the gap between the time it incurs financial damage resulting from a declared disaster and when such business secures other longer-term financial recovery resources, including payment of insurance claims or a long-term loan from the U.S. Small Business Administration (“SBA”).
In order to qualify for the Bridge Loan Program, small for-profit business applicants must:
- submit an application to the Florida Department of Economic Opportunity by May 8, 2020, along with supporting documents including business tax returns, individual tax returns and employer tax documentation;
- have been established prior to March 9, 2020;
- maintain a place of business in the State of Florida;
- be a for-profit employer business with at least two (2) and no more than one hundred (100) employees; and
- have suffered and be able to demonstrate economic injury as a result of the COVID-19 pandemic.
Because the Bridge Loan Program is not designed to be the primary source of assistance, eligibility is also linked to other financial sources of the eligible small business, based on credit reports provided to the Program. Note that certain business organizations are not eligible for assistance from the Program due to the nature of the activities conducted.
Each qualifying small business will be eligible for a loan up to $50,000, the entirety of which is completely exempt from all documentary stamp tax obligations typically imposed by the Florida Department of Revenue. Note that loans of up to $100,000 may be made in special cases as warranted by the need of the eligible small business. Loans will be made from the Program to the individual(s) who, individually or collectively, own at least 51% of the equity of the qualifying business. Each loan under the Program is for a one (1) year term and will be interest-free during such period. Following the one (1) year term, the interest rate will be 12% per annum on the entire unpaid balance until the loan is repaid in full. All borrowers will also be required to agree in writing that the proceeds of insurance claims, other loans applied for or to be applied for, or other financial assistance received will be used to repay the loan.
Our firm stands ready to serve our clients and friends in these difficult and unprecedented times. While following all federal, state and local government directives and public health and safety protocols, our offices are fully operational, and we remain ready and able to provide service. If you have any questions about the Bridge Loan Program or other legal implications of COVID-19, please do not hesitate to contact us for help.