MultiFunding.com CEO Ami Kassar joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss how small businesses can weather such a contracted economy amid the coronavirus outbreak.

Video Transcript

BRIAN SOZZI: We want to welcome In Ami Kassar, MultiFunding.com CEO. Ami, good to see you here. So you obviously deal with a lot of small businesses. What have you heard from them lately in light of the relief package that was passed from the government?

AMI KASSAR: So there's a lot of confusion. The EIDL sites, loans, and grants are now available on-- the application is up live on the SBA site, but that's a small fraction of the relief. The $349 billion through the Payroll Protection Program, that's tricky. Lenders are waiting for guidance from the SBA and the Treasury, and lenders have to each make their own decisions about how they're going to implement the program and put it into place.

ALEXIS CHRISTOFOROUS: And, Ami, I know a lot of small businesses-- I know many people who own these small businesses have been asking me, what is this going to look like, you know, this help? Is it a loan? Is it a grant? If it's a loan, is there an idea of a forgiveness of that loan at some point? What would the interest rate be? I mean, do you have any specifics on just what this assistance is going to look like for these small businesses?

AMI KASSAR: So I want to focus on the Payroll Protection Program because that's $349 billion versus $10 billion for the EIDLs, and it's a pretty fabulous program in that once you apply, to be eligible, all you have to do is show that you had employees and you were open for business on January 15. There's no look-back criteria. And essentially you can get a loan for up to 2 and 1/2 months, so your average payroll expense from last year, and two months of that will be forgiven. The rest of it will amortize over a 10-year note with no personal guarantees at an interest rate of 4% or lower.

ALEXIS CHRISTOFOROUS: So, OK, that sounds good. What defines a small business? Who would be eligible? Do you have to have a certain minimum number of employees and not max out? What are the parameters?

AMI KASSAR: It can be from 1 employee to up to 500, and, in some cases, companies even with higher than 500 will be able to be eligible.

BRIAN SOZZI: Ami, just looking through your prism of small businesses, the debate on Wall Street is that we may get a V-shaped strong recovery in the second half of the year. Do you see that when you're-- or do you hear it when talking to a lot of small-business owners?

AMI KASSAR: Most small businesses on the front right now are-- they're not thinking about the recovery. They're focused on survival. They're focused on decisions about who to layoff, how many people to layoff, how to keep the lights on for the next, you know, 60, 90 days, and no one's certain how long this is going to go for. So recovery is not on the mind of any small businesses I talk about. Survival is.

BRIAN SOZZI: What is your sense in terms of layoffs? Do you think-- take us through what a lot of small businesses could do. They've delayed layoffs in some respects, some of them in some industries, but what does it look like going through, let's say, the second, third week in April?

AMI KASSAR: Yeah, a lot of that depends on how quickly the bureaucracy and the banks can get these PPPs into place because the PPPs provide a great incentive. Essentially if you keep your employees, the government's going to pay you to keep them for two months. So if we can-- if the banks and the SBA and the guidance and everything can get it all together and buy some businesses some time, that will give businesses a good reason to keep their employees on the payroll and [? intact. ?] The question is what's going to happen in this period between when the legislation was signed and the banks are actually able to implement it.

ALEXIS CHRISTOFOROUS: And, Ami, what about how many of these companies are going to be able to survive in the end despite all of the help they're going to be getting from lenders and from the government? I mean, I'm hearing that we could have 30% of our small businesses in this country not come back online when we do start to recover.

AMI KASSAR: I'm not sure anybody really knows. So unfortunately I think it's going to be the most fragile smaller businesses that will be hit the hardest. If you have no reserves it will be tougher. The EIDL grants are neat in that if you apply, you will, within three days, get a check for $10,000. That is forgivable if you don't get the program. So that can provide some relief to the smallest of businesses.

So it's going to be a Herculean effort. Everyone I know in the SBA community is working 24/7 to try to get this stuff in place so we can help as many businesses as we really can, but time's going to tell.

BRIAN SOZZI: All right, let's leave it there. Ami Kassar, MultiFunding.com CEO, thank you for the insight.