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COVID-19 Financial Resources to Keep Businesses Afloat

COVID-19 has changed the face of business forever, especially small to medium-sized organizations. In times of uncertainty, it’s helpful to cut through the noise and find concrete COVID-19 financial resources to keep businesses afloat.

A safety net of nearly $380 billion dollars is currently available for small to medium-sized businesses.

Under the newly passed Coronavirus Aid, Relief, and Economic Security (CARES) Act, here is a list of resources you can tap into to help you keep your doors open.

Paycheck Protection Program

The PPP is a program that has been designed for small businesses to retain workers.

The Basics:

  • Businesses with under 500 employees are eligible.
  • Some businesses meeting certain criteria may be eligible if they have more than 500 employees
  • Loan will be forgiven if 75% of the funds are used to pay employees, with the rest going towards rent, utilities, and other business expenses.
  • .5% interest with six-month deferral on payments.
  • In some situations, the loan will be converted to a grant, eliminating the need to pay it back.

How to Apply: SBA 7 lenders, credit unions, and other regulated lenders.

Small Business Debt Relief Program

The Small Business Debt Relief Program is for businesses with existing small business loans.

The Basics:

  • Covers loan payments up to six months
  • Covers payments on microloans, 504, and 7(a) loans
  • Also available for small to medium sized businesses who take out new loans within six months of the passage of the CARES Act.

How to Apply: Fill out an application to see if you qualify; you may also find other SBA solutions for your business on this page.

Express Bridge Pilot Loan

The Express Bridge Pilot Loan was created to provide immediate relief of up to $25k for small to medium sized businesses while they are waiting for other funding resources.

The Basics:

  • Funds must be used as working capital
  • Loans funded through SBA express lenders
  • Must prove a prior relationship with a lending institution prior to March 13, 2020
  • Maximum 100 to 1500 employees or maximum revenue of between $750k and $35.5 million
  • Short term loan, with a maximum term of up to seven years

How to Apply: Go to this page to download a PDF outlining eligibility requirements

Economic Injury Disaster Loan

Economic Injury Disaster Loans are set up specifically for organizations that suffer economic losses due to a nationally declared disaster, such as COVID-19.

The Basics:

You can request an immediate advance of up to $10k while your loan is being processed. You will NOT have to pay back this advance, even if your loan is denied. This makes it worth the time for any business to explore this option.

How to Apply: Fill out your application here. You may find other loans that you qualify for when you fill out this application.

Grants

Applying for grants can be challenging, but it may be worth it to help your business keep its doors open during the COVID-19 crisis.

Corporate Grants

Many large corporations are funding businesses with grants.

Amazon and Facebook are among those corporations currently offering grants for small businesses. Fundera has listed 107 corporations and grant sources for your business. 

Vertical Specific Grants

In addition, search for vertical specific grant opportunities. There are available grants for agriculture, healthcare, manufacturing and more.

Some very specific grants include:

Entrepreneurial Development: For “resource partners” that educate, train and advise small businesses, financial assistance is available.

Women’s Business Center Program:  Certain requirements have been lifted to qualify for these grants.

Minority Business Development Agency: Grants for organizations that educate, train and assist minority business owners in COVID-19 concerns that relate to their organizations.

State Grants

Many states are currently offering grants to small to medium-sized businesses within their borders. Check and see if your business qualifies for the state-specific grants as listed here.

State Resources

States are offering financial help for businesses hard hit by COVID-19.

Just some examples include:

New York City’s Employee Retention Program: This is intended for very small businesses with up to four employees. It consists of a grant that will cover up to forty percent of employee payroll for eight weeks. Read eligibility requirements and apply here.

Outside of NYC, you can access resources through city-specific programs, such as the Rochester Chamber of Commerce’s Federal, State and Local Financial Assistance page.

Colorado Small Business Emergency Relief Program: This is a program that connects small businesses to funding resources within their area. Fill out an “interest” form here.

Kansas Hospitality Industry Relief Emergency: Intended for businesses in the hospitality industry, these loans can range up to a maximum of $20k and the terms include 0% interest for 36 months.  While the initial round of funding has been given out, they are still accepting applications for this program for future relief efforts.

The Collier Comes Together-Corona Relief initiative for Southwest Florida: Covers food, rent, pandemic safety kits and other important needs with grants and supplies. The Community Foundation of Collier County is partnering with the health department and governmental outreach to offer relief to individuals and businesses throughout this crisis.

North Texas Cares: Supports non-profits that are providing services and supplies to those impacted by COVID-19 throughout North Texas.

Los Angeles City Small Business Emergency Microloan Program: This program offers up to $20k for businesses within the city of Los Angeles with 0% interest for up to 18 months and payment deferrals for six months. For other information, see the full terms here.

These are just a few of the COVID-19 financial resources individual states are extending to help small to medium-sized businesses. Check with your state and see what assistance you qualify for.

Crowdfunding and GoFundMe

Starting  Crowdfunding and GoFundMe campaigns are an option for small businesses affected by COVID-19.  The funds raised can be used for employee payroll, mortgage or rent, health insurance for employees and other organizational costs during this crisis.

GoFundMe is currently offering grants to businesses through their Small Business Relief Fund.

Loan Forgiveness

Businesses who had participated in the PPP before February 15, 2020, may be eligible for loan forgiveness. This loan forgiveness will cover funds used for employee payroll, interest on mortgage payments, and rent and utility payments. While these damages were incurred before the COVID-19 crisis, they are eligible to be “forgiven” now. This means you may be eligible to remove loan payments on an existing PPP if you qualify.

This is a separate opportunity from the COVID-19 related PPP loan forgiveness program.

Bankruptcy Considerations

While no one wants to consider filing for bankruptcy, the Federal Government is adding some provisions to make it financially easier on businesses who must do so.  Some of these provisions include:

  • Waiving of COVID-19 related grants and loans from “income” when filing
  • Modifications for businesses who are experiencing financial hardship due to COVID-19
  • Cap raised from $2.7 million to 7.5 million for debt limitations for Chapter 11

Lending Institutions

In addition to the COVID-19 financial resources listed above, check with your banks and other financial institutions to see what help they may be offering for small to medium-sized businesses during this crisis.

Check with your credit card companies and banks to see what types of relief they are offering. This could be anything from a new loan, extended credit limits, or payment deferral on existing accounts.

Many COVID-19 Financial Resources are Available

The long and the short of it is that many COVID-19 financial resources are available to your small to medium-sized business. They can be used for many different operating costs, but many are geared towards helping you retain your work force.

These resources feature generous repayment options, low (in many cases 0%) interest rates, and payment deferrals for up to six months.

They can be standard resources, such as loans, or payment deferral, such as with your mortgage lender. You may need to think outside of the box and consider things such as GoFundMe to bridge the gap of uncertainty.

Taking advantage of these COVID-19 financial resources may be the just the help you need right now, keeping your business afloat throughout this crisis and beyond it.

Check out other valuable tips and resources to help your small to medium-sized business navigate through this time of uncertainty.

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