So many around the country are facing tremendous hardships right now because of coronavirus. While most states started reopening in the late spring and early summer, some are rolling back those reopening plans as they wait to see the impact of a surge in coronavirus cases.
Small businesses such as bars and restaurants, many of which just reopened following a months-long shutdown, are now wondering what to do next.
In New York City, the tourism industry has been decimated in recent months, and that’s not showing signs of abating, as the state is requiring visitors from most of the country to self-quarantine and most entertainment venues, as well as in-restaurant dining, are on hiatus indefinitely.
Even for businesses that aren’t having to close their doors or limit their capacity, they’re facing trying financial times paired with public health concerns.
If you’re a small business, it’s so important to know there are financial relief options available to you. Small business can get help during coronavirus is the ultimate takeaway.
With that being said, June 30 was the original deadline for one of the most talked-about relief options, the Paycheck Protection Program (PPP). Lawmakers have extended the deadline to August 8th and may pass some other similar type of relief program. But even with that program soon to wrap up, that doesn’t mean there are no options.
Employer Tax Credits
If your business is closing because of orders issued by your state or local government, or you’re experiencing a decrease in your gross receipts of at least 50% compared to the same period last year, you may be eligible for a payroll tax credit for 50% on wages up to $10,000 per employee.
If you used a Paycheck Protection Program Loan, this wasn’t available, but the credit, if you can use it, is known as an employee retention credit.
There are certain employer requirements that have to be met. For example, you have to offer two weeks of paid leave to quarantined workers or workers with COVID-19 symptoms awaiting a diagnosis with a cap of 100% of their regular wages or minimum wage, whichever is the greater of the two.
Reimbursement for these costs in the form of tax credits is available for payments made between April 1, 2020, and December 31, 2020.
Economic Injury Disaster Loans (EIDLs)
The Small Business Administration (SBA) recently reopened their Economic Injury Disaster Loan (EIDL) program.
The EIDL program didn’t arise in response to the coronavirus pandemic, but it’s likely become more widely used because of it.
The EIDL program was expanded under the Coronavirus Aid Relief and Economic Security (CARES) Act, and it was done so to make it easier to get a loan for borrowers affected by covid-19 and the subsequent ripple effects.
The interim stimulus bill that was passed also provided another $60 billion in funding to the program.
The CARES Act also authorized advances of up to $10,000 that don’t have to be paid back, so they are grants.
EIDLs have a maturity of up to 30 years, and they are designed to help businesses navigate difficult times. They are meant to cover operating expenses and payroll that a business could have otherwise paid for barring the disaster.
The funds from these loans can’t be used for refinancing, federal debts or to repair physical damages. They also can’t be used to pay dividends or IRS tax penalties.
The amount a business can get depends on the amount of economic injury suffered by the business. Interest rates range from 2.74% to 3.75%.
Federal Reserve Main Street Lending Program
The Main Street Lending Program was created by the Federal Reserve during the economic downturn from the coronavirus pandemic. It’s meant as an alternative to the Paycheck Protection Program (PPP) and the EIDL program.
However, if you already applied for a PPP loan, you are still eligible for funding through the Main Street Lending Program.
This program isn’t affiliated with the SBA.
The Fed’s program is meant to help banks more freely lend to businesses by purchasing a greater portion of the loan, so the bank is taking on less risk.
Once a company gets a loan, the Fed will buy up to 95% of the loan from the bank. Then, the bank only has 5% left, and the loan terms are four years with amounts typically ranging from $1 to $25 million. These loans can’t be used to pay off existing debt.
The Main Street Lending Program is available to businesses with fewer than 15,000 employees or revenues of less than $5 billion annually.
Express Bridge Loan Pilot Program
Finally, another program to know about if you own a business right now is the Express Bridge Loan Pilot program.
The EBL program was initially created in 2017 as a way to help provide loans to small businesses located in communities with presidentially-declared disasters or other disasters as declared by the SBA. Under the initial program, SBA lenders could offer financing for up to $25,000 to small businesses for disaster-related purposes.
The SBA expanded the program in March 2020 because of COVID-19, following President Trump’s emergency declaration.
Loans can be made through March 13, 2021, because of extensions to the program.
The maximum term is seven years on these loans.
To qualify, you already have to have an existing relationship with an SBA Express Lender. The SBA also says the business has to have been operating when the pandemic was declared an emergency and it has to meet other SBA 7(a) loan requirements.
To apply for this loan program, you should contact the district office of your local SBA. You should receive the first loan disbursement within 45 days after your lender receives your assigned SBA loan number.
This is just a small sampling of federal programs for small businesses, but many cities and states are offering their own relief options, so check there as well if you’re a business owner.