In the wake of the Coronavirus pandemic businesses across the country are facing some unprecedented financial challenges. The CDC’s social distancing directives, along with state and local government advisories, have caused more than 30 million small businesses throughout the US to temporarily close their doors. 

Some of those businesses may have the necessary resources on hand to weather the shutdown, but the vast majority of smaller enterprises are going to find it a struggle to survive. The extended loss of revenue has the potential to be crippling, and it will be difficult for many smaller businesses to ride out the storm. But before anyone throws up their hands in despair take heart. There are financial relief opportunities available to small business owners who are quick off the mark and determined to save their investments.

Coronavirus Small Business Administration Loans

The United States Small Business Administration (SBA) has created a COVID-19 disaster relief program designed to provide aid to small businesses affected by the coronavirus outbreak. As part of the larger Coronavirus Aid, Relief, and Economic Security Act (CARES Act) the SBA is offering low cost loans, debt relief and paycheck protection programs for eligible businesses across the country. Businesses impacted by coronavirus related shutdowns are encouraged to apply directly to the SBA for financial support and advice. 

Available programs include:

  • Economic Injury Disaster Loan Emergency Advance – The SBA’s EIDL Emergency Advance provides up to $10,000 in disaster relief funds to small businesses impacted by the coronavirus. The program is limited to small and medium sized businesses with fewer than 500 employees.
  • Express Bridge Loan – This program is open to any business with an existing relationship with an SBA Express Lender. Express Bridge Loans are designed to provide financial support while businesses apply for a more substantial Economic Injury Disaster Loan. Eligible businesses can access up to $25,000 in low cost loans. Borrowers are promised a speedy turnaround on all applications.
  • SBA Debt Relief – This debt relief program provides for relief for small businesses with existing 7(a), 504, and microloans. The SBA will pay the principal, interest and fees on outstanding loans for a period of six months. Additional debt relief is also available to businesses with outstanding disaster relief loans through the SBA and its lending partners.
  • SBA Paycheck Protection Program – This debt relief program is designed to support business impacted by the COVID-19 pandemic. The SBA will provide loan forgiveness for small businesses that keep all of their employees on payroll for a minimum of 8 weeks. Money must be used for payroll, rent, mortgage and utilities. The program is open to businesses with fewer than 500 employees.

Credit Card Leniency Programs

A number of credit card companies have stepped up in this time of crisis to offer their cardholders deferred payment options, service fee waivers, and blanket forgiveness on late fees. These relief programs are primarily being offered to standard account holders who have been impacted by COVID-19, but some companies are extending their relief programs to include business accounts. 

Sprout Funding logoBusiness owners should contact their bank or credit card issuer to determine what coronavirus relief programs are being offered. Programs vary greatly, and every bank and credit card company will have their own requirements for participation in their programs. Business owners should also check with their primary lenders to determine if they are eligible for any other relief programs such as waivers of service fees or fee forgiveness for early CD withdrawals.

Tax Relief and Payment Extension

As part of the Federal government’s response to the Coronavirus pandemic the Internal Revenue Service (IRS) is offering relief programs for both individuals and businesses. The IRS is giving both individual filers and businesses an extension of 90 days in order to pay their tax debt. The deadline to file and pay business taxes is now extended until July 15, 2020. 

It is important to note that these tax relief provisions do not exempt businesses or individuals from their normal tax burden. It only provides for delayed payment options and a deferment of late filing penalties. The IRS urges all businesses that can file and pay their tax debt by April15, 2020 to do so as normal.

State and Local Resources

While the majority of COVID-19 relief is being managed by the federal government state and local authorities are also making provisions to support businesses in their communities. Naturally, the type and degree of relief for businesses varies by state, city and county. A prime example of state-sponsored relief sees the governments of Washington State and Florida offering low interest or interest-free loans for eligible businesses adversely impacted by the Coronavirus pandemic. Similarly, New York City has launched its Employee Retention Grant Program to help local businesses keep employees on payroll during the city and state shutdown. 

Again, relief programs will vary greatly by state and municipality and will be shaped by the impact of Coronavirus has on the local business community. Business owners are encouraged to contact their local Chamber of Commerce to find out what programs may be available.

Privately Sponsored Small Business Grants and Loans

An increasing number of independent companies are stepping up to help out their fellow entrepreneurs by offering grants for small enterprises impacted by the Coronavirus crisis. These grants vary greatly in requirements and dollar amounts, but they do offer additional support for small businesses struggling to survive an extended shutdown due to COVID-19. 

Some examples of grant programs being offered to struggling business includes:

  • Amazon’s Neighborhood Small Business Relief Fund – Amazon has dedicated $5 million to help small businesses in the Seattle area. Eligible businesses must have fewer than 50 employees on payroll and must earn less than $7 million dollars in annual revenue. Grants are reserved to businesses in the retail and service industries.
    A third party service provider will review all applications and grants will be issued immediately upon approval.
  • Facebook’s Small Business grant Program – Facebook is funding a $100 million relief program for small businesses across 30 countries. To be eligible companies must have between 2 and 50 employees, must have been in business for no less than 1 year, must prove an adverse impact due to COVID-19, and must operate in or near a location where Facebook does business.
  • Hello Alice Business Resource Grants – Hello Alice, a business resource program supported by Melinda Gates, is offering disaster relief grants of $10,000 for small businesses impacted by COVID-19. Hello Alice supports small business ventures run by women, people of color, veterans and members of the LGBTQ communities. Eligible applicants must have fewer than 50 employees currently on payroll and must demonstrate at least 1 year of operations in their community.
  • Stimulus 2020 – Stimulus 2020 is a privately funded stimulus program designed to provide aid and support for small businesses impacted by the Coronavirus pandemic. Eligible businesses can receive $1000 investment funds for their business. Eligibility is determined by location, business size, and level of crisis impact.
  • American Express Working Capital Program – Amex business cardholders adversely impacted by the spread of the Coronavirus can apply to the American Express Working Capital Program to access funds to pay vendors and suppliers. Loan amounts range from $500 to $150,000. Repayment terms are available at 30, 60, and 90 days. Interest rates vary between 0.6% and 5.25%.

Finding the Help You Need to Weather the Storm

The Coronavirus pandemic has forced small businesses throughout the country to face some very difficult challenges. Some business owners will be able to weather the storm, but others may be forced to make some very hard decisions. An extended loss of revenue will have many of us on the ropes. However, not all is lost. Programs exist to help small business owners survive the worst of this crisis. Federal, state and local governments are taking steps to support small business owners and give them the resources they need to keep their employees on payroll and safeguard their operations from devastating losses. Banks are providing additional loan options for businesses affected by the Coronavirus pandemic, and independent entrepreneurs are giving back to the business community by supporting grants for smaller enterprises suffering through this unprecedented health crisis. 

If your business has been adversely affected by the Coronavirus pandemic now is the time to research all of your financial relief options. The sooner you act the sooner you can determine how your business will fare in the coming months. Now is the time to take all necessary steps to secure the support and financial relief you need to see your business, and your employees, through these unprecedented times.

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