Please note: This article was posted on April 13, 2020 and its contents are subject to change. Please refer directly to the loan administrators’ websites for up-to-date information and changes to the available funding.
America’s entrepreneurs are known for being resourceful, determined, resilient, and creative. If you are a small business owner, you know just how hard you’re willing to fight for your company, employees, and customers. Fortunately, organizations from all over the country want to partner with you to ensure your small business can find financial relief during the COVID-19 pandemic (also called coronavirus). Here are popular financial assistance and disaster relief options that you may want to pursue further.
Federal relief for small businesses during COVID-19
The federal government signed The Coronavirus Aid, Relief, and Economic Security (CARES) Act into law on March 27, 2020. The legislation established a $377 billion fund, most of which will expand United States Small Business Administration (SBA) programs designed to provide payroll protection, economic injury protection, and debt relief for our nation’s small businesses.
The Paycheck Protection Program is an SBA loan designed to help you keep your workforce employed during the Coronavirus (COVID-19) crisis. If you have a small business, a non-profit organization, veteran’s organization, tribal concern, or if you are self-employed, a sole proprietor, or an independent contractor, you may qualify. According to SBA, “The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees…This loan has a maturity of 2 years and an interest rate of 1%.” You may apply using the PPP borrower application form.
The SBA is also offering low-interest federal disaster loans to provide working capital for small businesses within states and territories that have experienced economic disaster due to COVID-19. According to SBA, “The SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%. The SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years…Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19).” You may apply for the Disaster Assistance Loan here.
The SBA has also established a related loan advance: “In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.” Apply for the Loan Advance here.
In addition, the SBA is providing a financial reprieve for small businesses during the COVID-19 pandemic: “The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months. The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.” Further, the SBA is providing automatic deferments through December 31, 2020 for current SBA-serviced disaster (home and business) loans.
The Treasury Department and the Internal Revenue Service have extended the filing deadline from April 15 to July 15, 2020 to provide relief to individuals and businesses in response to COVID-19. The relief includes estimated tax payments for 2020 that would have been due on April 15, 2020. This extension is automatic, so you don’t have to file any forms to qualify.
State and local relief for small businesses during COVID-19
Many states, counties and cities have established programs to provide relief and assistance for small business owners. Be sure to check your state and local websites to find out what is available to you during this time. While you’re at it, check in with professional organizations or non-profit industry groups you belong to for leads on finding COVID-19 relief.
Follow the IRS link to your state revenue department page to discover whether your state is offering an extension. Many states have aligned their tax filing dates and quarterly payment extensions with the federal tax filing date. This could be one more way to gain some financial wiggle room, but be sure to confirm before delaying payment.
Find your state government page and check to see what assistance they offer. States have established moratoria on evictions, microloans, bridge loans, grants, and many other forms of emergency relief for small business owners like you.
Lender relief for small businesses during COVID-19
Banks and lenders are also offering relief for small business and individual borrowers in many cases.
The FDIC has urged financial institutions to work with customers impacted by COVID-19. Check with your lender to find out whether they have implemented any relief programs. FDIC-suggested relief includes waiving of fees, late payments, delinquencies, and early withdrawal penalties; easing restrictions on cashing checks; increasing credit card limits; offering payment deferments or extensions; and working with customers who are unable to work due to business closures, slowdowns, or sickness.
Corporate and community COVID-19 relief for small businesses
Even corporations and communities have made efforts to help small businesses during this pandemic. This is where that creativity we attribute to the entrepreneurial spirit comes in. Start brainstorming where and how you can generate revenue to keep your business rolling. You might just find help in the most unexpected places.
People love their favorite coffee shops, wine cellars, beer gardens, and bistros. They become attached to their personal trainers, hair stylists, house cleaners, and trusty mechanics. They’ll be crushed if their neighborhood gourmet pet supply, corner hardware store, or favorite fashion boutique disappears. And they’re willing to contribute to the fight. Consider establishing a crowdsourcing fund to keep your business running.
Big businesses are helping small businesses. You can find a range of grants and cost breaks from Facebook’s Small Business Grants Program to Amazon’s Small Business Neighborhood Fund. Communications giants like Verizon, AT&T, and Comcast are providing relief with a variety of measures such as free Wi-Fi hotspots, waived interruptions due to nonpayment, free internet, and more. Yelp and Google are waiving advertising fees for some small businesses during this time, and GoFundMe, Intuit QuickBooks, Yelp, GoDaddy, and Bill.com have established a Small Business Relief Initiative.
Thanks for reading our article posted on April 13, 2020. Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. See more small business resources or check your current rate in 3 minutes.