Small businesses across the United States are facing almost unprecedented challenges right now. The ongoing crisis around COVID-19 and the public health response required to combat it has radically changed the economic situation for many companies.
Many businesses have been forced to lay off employees or even close – at least temporarily – in the face of these quickly changing circumstances. The worst part might be the unpredictable nature of the situation. No one knows for sure how soon lockdowns will end or what might happen to the country in the time before that reopening happens.
And while each business will have to chart their own way through this crisis, the government is working to provide the tools and support small business owners may need to keep their companies alive. The CARES Act is the largest piece of coronavirus legislation so far, but it’s not the only law that has been passed targeting aid at small businesses.
As of the writing of this article, the Senate and House passed a bill that will provide additional funding to disaster loan programs such as the Paycheck Protection Program. Since the funds ran out originally, there’s no way of knowing how long this round of funding will last once it’s signed into law by the president. That’s why learning about local loan options is more important than ever.
It may be difficult to know where to start in the confusion around all of these different avenues for relief, but with a little effort and some effective guidance, you could get crucial emergency support for your business. Find out what help is available and figure out what could best serve you and your company’s interests.
Nationwide Financial Resources
The CARES Act made federal loan money available to small businesses across the country. Any private company or nonprofit with fewer than 500 employees should qualify for some kind of assistance, and businesses with more than 500 employees can still qualify if they otherwise fit the Small Business Administration’s size standards.
Many of those avenues for accessing these loans are starting to run out of money and no longer receiving applications, but they are likely to begin operating again soon as more money is appropriated. Act now so that you’ll be prepared when they do.
Here are the primary avenues available for accessing those federal funds:
Paycheck Protection Program
The Paycheck Protection Program (PPP) was instituted to offer loans to businesses across the country to cover payroll costs and keep individuals employed. Then, provided that the loans are used for specific payroll-related costs, those loans can be forgiven, making the paycheck protection loan into a grant.
Unfortunately, the rollout of the program has caused some controversy. While $349 billion was set aside for the loans, the Small Business Administration announced that, as of Thursday, April 16th, the Paycheck Protection Program is out of money, and the SBA would not be accepting more applications for loans.
However, as of April 23rd, a bill that will provide additional funding to the program has passed the Senate and House by large majorities. The bill still needs to be signed by the president before it gets rolled out.
If you can take advantage of a PPP loan once the funding returns, do so. However, if you end up missing the window and the funding runs out like last time, there are other options for relief. Check if your state or city offers any local disaster loans.
Emergency Injury Disaster Loans
Emergency Injury Disaster Loans (EIDLs) are smaller loans for amounts up to $2 million available to any small business affected by the COVID-19 crisis. Applying for these SBA disaster loans is relatively easy, and the SBA has promised to move quickly to get businesses the money they need.
Businesses can file for loans with interest rates less than 4 percent and use the money to cover payroll, debts, and any other costs they would otherwise have been able to pay if they had not been affected by the novel coronavirus public health disaster.
Companies requesting a loan can also request a $10,000 advance payment to help them cover urgent costs while waiting for the loan to be processed. That advance does not need to be paid back.
Express Bridge Loans
While the government has been trying to get funding out to businesses that need it as quickly as possible, they are processing enormous amounts of loans, and delays are inevitable. That’s why they also made bridge loans of $25,000 available for any business that already has a relationship with an SBA Express Lender.
Through this program, some businesses can get an injection of cash now, helping them to stay afloat until they are approved for other loans.
State-by-State Financial Resources
Even if the federal funding doesn’t seem like an option, there might be other ways to secure a low-interest loan for your business quickly in the current crisis. Many different states and cities have created programs to help small businesses like yours continue to hold up local economies around the country. Find your state below and see what’s available.
If your state isn’t listed, then there may be no new programs supplying emergency loans to small businesses as of this article’s publication, or the programs that were running are not currently accepting new applications. Unless your state or local governments or organizations put something together, you will have to rely on federal funding and your relationship with the local bank.
Check in regularly with your local chamber of commerce and other small business organizations with your state. Conditions change from day to day, and your local organizations may be the best source for finding out about local funding opportunities.
The Chamber of Commerce of West Alabama has started a small business relief fund. TruFund Financial Services Inc. is offering loans to minority- and women-owned Alabama small businesses and Birmingham is operating a small business emergency loan fund called the BhamStrong Fund.
The Alaska Industrial Development and Export Authority has created a billion-dollar loan guaranty program in order to support banks offering loans to all businesses that need to borrow.
An Alaska Microloan Program also makes regular loans of up to $70,000 available for short terms to fund some business costs.
WaFD bank will open 5-year credit lines for small businesses affected. Community Investment Corporation in southern Arizona is also helping businesses with small bridge loans.
The Arkansas state government is working on providing COVID-19 resources for businesses, especially for those involved in essential work. Small and medium-sized businesses can get loans through the Quick Action Loan Program and reduce their costs by using the Shared Work Unemployment Compensation Program.
The governor of California set aside a large fund to support loans to businesses affected by COVID-19 that can’t get funding at the federal level. The California IBank and many individual counties and municipalities like Los Angeles and Sacramento are also making emergency loans available to businesses in those areas.
Colorado is encouraging businesses to avoid layoffs by helping to cover costs. Businesses can apply to reduce hours and have unemployment pay a portion of their staff salaries. The Colorado Assistance Fund offers immediate financial help to nonprofits and others directly meeting community needs. The city of Denver aims to provide small loans and grants to impacted businesses in the area.
The Connecticut Recovery Bridge Loan Program was offering small loans to help many Connecticut businesses hold on until they received larger emergency loans, but that program has been put on hold. The state is offering partial unemployment benefits to employees with reduced hours.
The Hospitality Emergency Loan Program is offering immediate financial assistance for hospitality businesses such as restaurants and hotels in Delaware. These are largely no-interest loans meant for small businesses affected by the pandemic.
The Hospitality Emergency Grant Program is awarding small grants to many hospitality businesses in Illinois. Chicago’s small businesses can draw financial support from the Chicago Small Business Resiliency Loan Fund, and those outside of Chicago can file with the Illinois Small Business Emergency Loan Fund.
Some businesses in Indiana waiting to secure long-term loans might be able to get short-term relief through the Indy Chamber’s Rapid Response Hub for low-interest bridge loans.
While state-operated grant programs in Iowa have stopped receiving new applications, the Iowa Economic Development Authority maintains a list of small grant-offering organizations in the state providing relief to some applicants.
Contractors and gig economy workers in New Orleans can apply for financial relief through the New Orleans Business Alliance.
Small businesses can apply to the Finance Authority of Maine for direct relief loans or interim loan relief until the SBA loan program receives new funding. FAME is still accepting applications, although it has announced that it will not have the funds to approve every loan application it receives.
While the federal programs were still debated, Massachusetts was providing emergency loans to small businesses and nonprofits with the Small Business Recovery Loan Fund. This program closed when federal funds became available, but it might be reinstated if the need continues.
The Michigan Economic Development Corporation compiles a list of programs providing emergency funding to small businesses in Michigan. Some are still accepting applications while some are not. Easy business relief loans are available in Wayne County through TCF Bank.
Nonprofits and community organizations in Minnesota and a few other states can apply for grants from the Community Benefit Financial Company Emergency Fund. The state legislature is also offering no-interest emergency loans to small businesses in the state, but it will rely on further funding approval in order to continue.
Nonprofits and organizations working to benefit their communities in Montana can apply for grants from the Otto Bremer Trust’s $50 million emergency fund.
COVID-19 business finance resources in New Mexico include loans possible through the New Mexico Recovery Fund or the NMEDD COVID-19 Business Loan Guarantee Loan Program.
If you want to receive updates about local and federal funding, you can sign up through NYC.gov here.
Area organizations may be offering emergency funding at the local levels. For example, the One Buncombe Fund provides low-interest loans for Buncombe County businesses impacted by COVID-19.
Small businesses in North Dakota can apply for emergency support through the North Dakota Development Fund Loans, depending on their status and type of business.
Business Oregon keeps track of financial programs and funds encouraging development and providing emergency aid for small businesses in Oregon.
If you’re a business owner in Pierce County, you can apply for an Emergency Small Business Relief Loan provided through the Pierce County Council.
Through initiatives like Small Business 20/20, Wisconsin is feeding funds to approved community organizations who can then provide grants to small businesses struggling with cash flow during this disaster. Nonprofits can also apply for a grant from the Otto Bremer Trust emergency fund.
Nonprofits in Wyoming serving vulnerable populations may be eligible for support from the Community Foundation of Jackson Hole.
Even if your state or county wasn’t included in this list, it’s still worthwhile to check with your local government to see if they offer any small business relief.
Whatever these next few months look like for your business, you’re going to need to be careful and attentive in taking care of your finances. Finish your tax return, if you haven’t yet done so, and don’t hesitate to seek guidance from the professionals if you’re worried about making the right choices in guiding your company.
Don’t give up on your company and the family you support. The opportunities for funding are out there, and with a little determination, you can get your company what it needs and weather this storm. We’re going to get through it together.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. 1-800Accountant assumes no liability for actions taken in reliance upon the information contained herein.