Small Business COVID-19 Relief
Most businesses are struggling during the current social distancing regulations. In responses, the Small Business Administration (SBA) has stepped in to greatly expand its support of small businesses. There are multiple facets to this expansion through the CARES Act.
Economic Impact Disaster Loans
The SBA had this program in place before the pandemic, but the the CARES Act allocated $10 billion for EIDLs and (1) expanded who could apply for the loans, (2) made it easier for businesses to get the loans and (3) made the terms more favorable for the small businesses. Sole proprietorship and contractors can now apply for the loan. The loans are not based on your credit scores or repayment ability. If your loan is less than $200,000, you do not need to sign a personal guarantee.
$10,000 Emergency Loan (Grants)
As part of this application you also will have the option to apply for a $10,000 emergency loan that essentially becomes a grant (because you do not have to pay it back) when you use it for approved purpose (payroll, rent, etc.) If you are a small business that is struggling you need to apply for this loan.
Paycheck Protection Program Loan Guarantee
This program provides small to million dollar loans to companies to help them cover payroll expenses and rent/mortgage for their businesses. Portions of the loan can be forgiven if spent on specified expenses during a specified time frame (currently 8 weeks). The payment terms are up to 10 years with a maximum interest rate of 4%. Just as with the EIDLs above, there is no personal guarantee and no collateral is required for this program.
Essentially, if you are struggling business you need to look into this program and avail yourself to its opportunities. Times are tough right now for landlords who are unable to evict, franchisees who are unable to be open, and businesses. The government has opened up its funding to make it quicker and easier for small businesses to get funds to help through these difficult times, it is up to you to go apply to help keep your business and the economy working.