Small business owners across the U.S. are feeling the financial strain caused by the coronavirus pandemic. Many businesses have been forced to close up shop and lay off workers. Others are trying to weather this crisis in the hopes of returning to normal business soon. To help you find support, I’ve compiled a list of small business resources for getting through this uncertain period.
This list covers federal financial relief for small businesses under the CARES (Coronavirus Aid, Relief, and Economic Stimulus) Act, including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Emergency Advances (EIDL).
I’ve also included programs from independent sources, state and local programs, tax relief, and more. This list will be updated as my team learns about new resources or changes.
As a small business owner myself, I fully understand how stressful this time is, and I hope these small business resources offer some relief.
17 small business resources for surviving COVID-19
Small Business Administration (SBA) temporary funding programs
The CARES Act has established a few new and temporary funding sources for small business owners who are experiencing financial stress due to coronavirus.
I’m going to break down the new small business aid plans below, but I also encourage you to review The Small Business Owner’s Guide to the CARES Act, created by the U.S. Senate Committee on Small Business and Entrepreneurship. It contains information about each of the SBA programs, answers to FAQs, and links to official sites.
1. Paycheck Protection Program
This program incentives small business owners to keep workers on their payroll by offering up to $349 billion in forgivable loans to small businesses during the COVID-19 crisis. It’s available for any business with less than 500 employees, and also applies to:
- Sole proprietorships
- Independent contractors
- Self-employed people
- Private non-profit organizations
- 501(c) (19) veterans organizations
- Tribal businesses
This is an SBA loan that is fully forgiven if the funds are used for payroll costs, most interest on mortgages, rent, and utilities over the 8-week period after the loan is made. You will also need to maintain your employee and compensation levels to receive full forgiveness.
Loans can be made for up to two months of your average monthly payroll costs from the last year, plus an additional 25% of that amount.
Payments will be deferred for six months. There are no fees, and the loans don’t require collateral or personal guarantees. The interest rate is set at 1.00%, which will accrue over the six-month deferral period, but there is a 4% interest rate cap, so it’s entirely possible it could increase.
The first few days of applications, starting April 3, 2020, were only available to small businesses and nonprofits. Sole proprietors and independent contractors were able to start submitting applications on April 10.
The program is open for applications now until June 30, 2020. It’s highly recommended that you apply ASAP because there is a funding cap, and loans will be given on a first-come, first-served basis.
Funds will be dispersed as quickly as possible, but it may take a week or two for approval.
What you need to know before applying for PPP:
- You can apply through an existing SBA lender, a federally insured credit union, any federally insured depository institution, or Farm Credit System. You can also contact your local lender to see if they’re participating, or check the SBA’s site using your zip code for eligible lenders.
- You need to complete a Paycheck Protection Program loan application, available here.
- You must submit payroll documentation.
- You can only take out one loan under this program.
- Because this program will likely have a high number of enrollees, you probably won’t be able to use more than 25% of the forgiven amount for non-payroll expenses.
- Loans are due in two years, but you can pay them back early with no prepayment penalties or fees.
In case you missed the link above, you can find the application for the Payroll Protection Program here. Learn more about the Paycheck Protection Program on the SBA website.
2. Economic Injury Disaster Loan Emergency Advance
Economic Injury Disaster Loans (EIDL) are part of the Small Business Administration’s normal aid, which offers small business owners funds during designated disasters. Businesses of the same sizes and types eligible for the PPP are also eligible for an EIDL.
EIDL loans can be made for up to $2 million, and the funds are intended to help businesses cover payroll and other operating expenses. You can not use these funds for refinancing, making loan payments on other federal debts, repairing physical damages, paying IRS tax penalties, or paying out dividends.
The expanded program under the CARES Act offers a loan advance of up to $10,000 to businesses that are currently experiencing financial hardship due to COVID-19. The advance is in the form of a grant, meaning there is no obligation to repay the advance amount if you use it for coronavirus-related costs (payroll, sick leave, operating costs). You can receive the advance within three days of application.
More to know about Economic Injury Disaster Loans:
- Interest rates are 3.75% for businesses and 2.75% for non-profits with a 30-year term.
- Payments on coronavirus EIDL loans are deferred for one year.
- You can receive up to $200,000 without a personal guarantee.
- No collateral is required for loans of $25,000 or less.
- Approval is based on your credit score, but the parameters are somewhat relaxed.
- The SBA will review your tax records.
- You cannot take out both a loan under the Paycheck Protection Program and this one.
3. SBA Express Bridge Loan Pilot Program
The idea behind this program is to provide expedited and short-term relief while you’re waiting on longer-term financing through an EIDL loan. Small business owners can receive a bridge loan of up to $25,000.
The same types of small businesses that are eligible for the above two SBA programs are eligible for an express bridge loan, but you need to have a previous relationship with an SBA Express Lender to obtain one.
More to know about the Express Bridge Loan Pilot Program:
- Funds are available within 45 days of approval, and no later than 90 days.
- Because this is part of the EIDL program, your loan must be used for working capital, and only operational expenses that support the survival or reopening of your small business.
- You must have established a relationship with an SBA approved Express Lender on or before March 13, 2020 (the day the disaster was announced).
- The maximum interest rate is 6.5% over the prime rate.
- The maximum loan term is seven years.
- Fees are up to a $500 guaranty fee (or no more than 2% of the guaranteed portion of the total amount of the loan), annual service fee of no more than 0.55% of the guaranteed portion of each loan, application fee that is the greater of 2% of the loan amount of $250, and a late payment fee that will not exceed 5% of the scheduled payment.
You can learn more about the program and how to apply for it here.
4. SBA Debt Relief
Small businesses with non-disaster SBA loans may qualify for an automatic six-month deferral of payments, interest, and fees. This is for current 7(a), 504 and microloans. The debt relief is also for any new ones issued prior to September 7, 2020.
There’s also additional debt relief if you have a current SBA Serviced Disaster Loan, but you must have had “regular servicing” status on March 7, 2020. This is an automatic deferral, but interest will continue to accrue on the loan. You can continue making payments if you’re able to.
The Small Business Administration recommends contacting your Loan Servicing Office to see if your loan is being automatically deferred. Here is the nationwide contact information:
- Birmingham Disaster Loan Servicing Center, 800-736-6048, [email protected]
- El Paso Disaster Loan Servicing Center, 800-487-6019, [email protected]
You can apply for SBA debt relief in addition to the Paycheck Protection Program.
Even more small business resources
The resources you just read about are specific financial relief and small business help as part of the CARES Act, but there is plenty more out there. The rest of the small business resources on this list include programs from large companies, tips for finding local aid, and more.
5. SBA Local Assistance
The Small Business Administration offers counseling, mentoring, and training services to small businesses across the U.S. You can check what kind of local assistance is available in your area here.
6. The Main Street Initiative from MainVest
MainVest is an investment platform that helps small businesses find investors in their community, and is regulated by the Financial Industry Regulatory Authority (FINRA). The Main Street Initiative was launched to help small businesses affected by COVID-19, providing $2,000 zero-interest loans to eligible businesses.
You will have to launch a capital raise – a fundraising campaign funded by accredited and non-accredited investors in your area – on MainVest’s site to be eligible. You can learn more about The Main Street Initiative here.
7. Facebook’s Small Business Grants Program
This is a $100 million cash grant and ad credit program to help businesses affected by the crisis. Grants can be used on operational costs, rent, payroll, and connecting with customers.
Facebook estimates that up to 30,000 small businesses will be eligible. Here are the requirements:
- Have between 2-50 employees.
- Have been in business for at least a year.
- Have experienced financial strain due to COVID-19.
- Be in or near one of Facebook’s locations – you can find locations and learn more about the program here.
8. Amazon’s Neighborhood Small Business Relief Fund
This is a $5 million fund that is available to affected small businesses near Amazon’s HQ in Seattle.
9. Yelp’s fund for local businesses
Yelp has announced a $25 million fund that focuses on independent local restaurants and nightlife businesses. It includes waived advertising fees, free advertising, as well as free products and services.
10. Google ad credits for small and medium-sized businesses
Google is offering $340 million in ad credits for small and medium-sized businesses to use through the end of 2020. These credits work across all Google Ads platforms.
11. The Restaurant Worker’s Community Foundation
The RWCF has compiled a list of resources for anyone who owns a restaurant or restaurant group. It includes relief funds for restaurant workers, financial assistance, volunteering opportunities, policy advocacy, information for business owners, and more.
12. National Federation of Independent Businesses
This is a small business special interest group that is offering legal resources and webinars on small businesses and COVID-19.
13. Help for small businesses from Hello Alice
Hello Alice is a free small business support platform, and they have compiled a list of resources to address coronavirus-related problems, including:
- Help in applying for emergency grants – Hello Alice has their own grant program offering $10,000 grants.
- Financial aid options.
- Information on how to operate remotely.
- Instructions on how to build an online presence.
- Anxiety and mental health support.
- Advice on how to pause or close your business.
- Updated government and policy info.
- Best practices from other business owners.
14. Small Business Relief Initiative and Fund through GoFundMe
GoFundMe, Yelp, and Intuit QuickBooks have started a combined financial relief fund that provides matching grants to businesses. If your business raises $500 on GoFundMe, the initiative will give your business an additional $500.
15. Local aid programs
A number of states and cities have set up programs to help small business owners, including:
- City of Los Angeles Small Business Emergency Microloan Program: Emergency microloans of $5,000-$20,000 to businesses that provide low-income jobs.
- Denver Small Business Emergency Relief: Cash grants of up to $7,500.
- Florida Small Business Emergency Bridge Loan Program: Short-term funding loans of up to $50,000 to small business owners.
- Chicago Small Business Resiliency Fund: Low-interest loans of up to $50,000.
- Michigan Small Business Relief Program: Grants of up to $10,000 and loans from $50,000-$200,000 to companies with 50 employees or less.
- New York City Small Business Continuity Fund: Up to $75,000 in interest-free loans for businesses with 100 employees or less.
- Beaverton Emergency Business Assistance Program: Business in Beaverton, Oregon can apply for $2,500/month mortgage or rent reimbursement.
You can find more state and local aid programs by checking with your local chamber of commerce. Here’s the U.S. Chamber of Commerce Directory to find yours.
16. Tax relief for small businesses
The CARES Act includes some changes to taxes and tax policies that may help your small business during this crisis.
- The normal tax filing deadline has been extended to July 15, 2020.
- Some businesses are eligible for employee retention tax credit.
- Businesses and self-employed individuals can delay their payroll tax payments.
- Businesses with net operating losses will see some relaxed limitations.
- Businesses will be able to increase their business interest expense deductions on their tax returns.
- Businesses in the hospitality industry will be able to immediately write off costs related to improving facilities and increasing cash flow.
- Temporary exception from the alcohol excise tax if the alcohol was used to produce hand sanitizer.
I suggest contacting a tax professional to see how you can take advantage of these changes.
17. Leniency from credit card companies
A number of credit card companies are offering small business help to customers affected by this crisis. Here’s a list of banks that have announced financial relief options:
- Citi is waiving monthly service fees for small businesses, remote deposit capture fees, and penalty waiver for early CD withdrawals for 30 days.
- Wells Fargo and Capital One have suggested customers contact them for help on a case-by-case basis.
- Bank of America is offering payment deferrals on credit cards.
Those are just a handful of the big banks, and you should contact your local bank or credit union if that’s what you use for your small business needs.
The final word on the small business resources available
Running a small business is both terrifying and incredibly rewarding. And I truly hope this list helps you with the terrifying parts of it right now.