Like a catastrophic tsunami, COVID-19 is leaving a path of destruction in its wake––forcing mandatory closures onto small businesses.
Despite the confusion and chaos brought on by this pandemic, businesses have a growing number of resources and relief programs to turn to, including many new provisions included in the stimulus package passed by the Senate. The FDIC is also working behind the scenes to help banks aid those affected by the coronavirus, with both personal and business finances.
Assistance for Federal and Small Businesses
The stimulus package passed by the Senate includes several programs designed to assist small businesses who have been impacted by COVID-19, such as:
Paycheck Protection Loans
The U.S. Small Business Administration (SBA) will guarantee loans with terms of up to 10 years with a maximum amount of $10 million for eligible businesses––with fewer than 500 employees. Businesses can qualify for loans which will be provided by lenders including credit unions and banks. For certain eligible businesses, loan deferment will be available for six months to a year. These loans are partially forgivable if the business maintains its payroll for eight weeks at employees’ normal salary levels.
U.S. Small Business Administration Economic Injury Disaster Loans
As part of its disaster relief, the SBA is providing working capital loans of up to $2 million to small businesses and nonprofits affected by the COVID-19 pandemic. Loan repayment terms vary by applicant, up to a maximum of 30 years. These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Payments can be deferred for up to four years.
Emergency Grant of $10,000 to Qualifying Businesses
If your business was denied loan assistance, you can still access this grant which can be used to provide employee sick leave, maintain adequate payroll, and meet other financial needs such as rent expenses.
Federal Income Tax Deadline Extension
The federal income tax return filing deadline is now set for July 15, 2020. In addition, the IRS has also extended the deadline for both businesses and individuals for tax payments of up to $10 million to July 15, 2020.
If you’re unsure of your state’s stance on the issue of tax returns and repayments, check with your state tax agency to find out if your business has more time to file taxes as a result of COVID-19. Multiple states have aligned their tax filing and payment deadlines with the new federal deadline.
State and Local COVID-19 Small Business Assistance
Programs for states and municipalities are being added by the day. For up-to-date information regarding coronavirus relief available in your area, visit your governor’s website.
Here are a few small business assistance programs that may help your business during the uncertain times ahead:
Denver Small Business Emergency Relief
This relief program offers cash grants up to $75,000 to businesses in industries that were hit hard by COVID-19.
Who is eligible? Businesses that have lost the ability to operate, including restaurants, small retail shops, and hair and nail salons.
How can you apply? The first applications will be due March 31st, and will be dispensed on a monthly basis.
Florida Small Business Emergency Bridge Loan Program
For certain coronavirus-stricken businesses in Florida, loans of up to $50,000––$100,000 in special instances—are available. These loans are meant to serve short-term funding relief that can be paid off once businesses can get a hold of alternative funding. For the first year loans are free, but after that, they will collect interest at 12%.
Who is eligible? For-profit businesses with two to five employees are eligible to receive these relief benefits.
How can you apply? To apply, submit an application by May 8, 2020, along with the required documents including tax returns, individual tax returns, and employer tax documentation.
NYC Employee Retention Grant Program
New York City is offering small businesses with one to four employees the opportunity to apply for a grant of up to $27,000 that covers 40% of payroll costs over the course of two months. To qualify, you must show that you lost 25% of your revenue due to COVID-19.
Who is eligible? To be eligible, your business must be located in one of New York City’s five boroughs, have been in operation for more than six months, and have no current tax liens or legal judgments.
How can you apply? To apply, visit the New York City Department of Small Business Services website and submit financial documentation, as well as payroll records and bank account information.
Chicago Small Business Resiliency Fund
Small businesses in Chicago can apply for low-interest loans of up to $50,000 with repayment terms of up to five years. The amount of loan your business qualifies for will be dependent on how much your business was affected by COVID-19.
Who is eligible? To qualify for this loan, you must be able to provide proof of a 25% or more drop in revenue, have less than $3 million in revenue, and fewer than 50 employees.
How can you apply? Apply online and include your most recent tax return and bank statements dating back to October 2019. You must present your government-issued photo ID.
San Francisco COVID-19 Small Business Resiliency Fund
The San Francisco Resiliency Fund is available to businesses with one to five employees to help cover rent and employee salaries. Businesses can apply for up to $10,000 in emergency funding.
Who is eligible? To be eligible for this emergency fund you must show that you lost 25% or more of your business’ revenue, and that you have less than $2.5 million in gross receipts and transactions. In order to qualify, you must be able to show that you’re properly licensed in San Francisco.
How can you apply? To apply, fill out an application form the San Francisco Office of Economic and Workforce Development website.
A moratorium on evictions for small and medium-sized businesses is available for businesses affected by COVID-19––this is effective for thirty days.
If your business was hit by the uncertainty of COVID-19, you’re not alone. We recommend checking in with small business loan assistance programs to help you navigate your business after the coronavirus.