COVID-19 Business Loans and Disaster Relief
Businesses have been hit hard by mandatory closures and safety measures required to slow the spread of the coronavirus (COVID-19). Many of our clients are asking for guidance on loan assistance and disaster relief.
But businesses have a growing number of resources and relief programs to turn to, including emergency funding from the government, protection from eviction and business loan deferment. The FDIC is encouraging banks to work with customers to provide coronavirus-related assistance, related to both personal and business finances.
On March 27th, a $2 trillion fiscal stimulus measure, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. Among other items, the measure provides $350 billion in federally guaranteed loans to small businesses and establishes a $500 billion government lending program for distressed companies. See details below with more information coming soon.
Below is a list of current federal, state and lender-specific support available to business owners now, which will be updated to include programs as they’re released and refined. Return to this page regularly.
Federal Coronavirus Small Business Assistance
If you need cash to offset lost revenue and help keep your business afloat, the programs below can help. The U.S. Small Business Administration (SBA) coronavirus resource page provides a list of relief programs, and it offers guidance to small business owners during this crisis.
Federal Reserve Main Street Lending Program
CARES Act – Paycheck Protection Program
The Coronavirus Aid, Relief and Economic Security Act (CARES) includes $350 billion in emergency loans for small businesses (The Paycheck Protection Program) to help them keep workers employed. In fact, if small businesses maintains or later restore their payrolls a portion of the loan may be forgiven.
The US Department of The Treasury issued late March 31st a first round of guidance for the Paycheck Protection Program. You can begin to apply as early as April 3rd. For detailed information on Paycheck Protection Program details and how to apply CLICK HERE.
**IMPORTANT NOTE** Please be cautious of potential scammers who may be reaching out to offer you assistance in applying for loans.
- NEW: PPP Program Opens to Self-Employed and Independent Contractors 4.10.2020
- NEW: SBA Issues PPP Frequently Asked Questions; Gives Favorable Answers. 4.7.2020
- SBA & US Treasury Frequently Asked Questions. Released late evening 4.6.2020
- SBA Answers More Key PPP Questions UPDATED; 4.4.2020 with Additional SBA Guidance
- Answers to More CARES Act Emergency Loan Questions 4.2.2020
- Q&A for CARES Act Emergency Loans – Round 1
SBA Economic Injury Disaster Loan Program
As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus.
These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.
- As of March 23, businesses in every state plus American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands can apply.
- You can use the loan to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay.
How to Apply
- Apply online and select “Economic Injury” as the reason you’re seeking assistance.
- You’ll need to supply required supporting documentation that could include the business’s most recent tax returns, a personal financial statement and a schedule of liabilities that lists all your current debts.
- Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application.
State and Local Coronavirus Small Business Assistance
States and municipalities are adding programs by the day. Check your governor’s website for up-to-date information about relief available in your area. The National Governors Association offers a list of governors’ websites. If you have questions related to available assistance in states other than Illinois, please contact your Warady & Davis LLP advisor at 847-267-9600; firstname.lastname@example.org.
Emergency Small Business Grants and Loans Assistance
Under the leadership of Governor JB Pritzker, DCEO is working with partners to launch more than $90 million in emergency assistance programs for Illinois small businesses. SEE DETAILS HERE. These initiatives include:
Hospitality Emergency Grant Program
To help hospitality businesses make ends meet in the midst of the COVID-19 pandemic, DCEO is launching the Hospitality Emergency Grant Program with $14 million drawn from funds originally budgeted for job training, tourism promotion, and other purposes.
Who is eligible?
Bars and restaurants with a valid license to serve food or liquor and who generated revenues of less than $1 million in 2019. Hotels with a valid license (hotels, motels other lodging establishments) and who generated revenues of less than $8 million in 2019.
How do businesses apply?
Businesses can submit an application online here: Landing Page, English Application, Spanish Application. Applications for awards will be accepted until 5:00pm on April 1st, and winners will be chosen via a lottery, therefore, there is no benefit to submitting an application first as long as a valid, complete application is received by the deadline.
Illinois Small Business Emergency Loan Fund
DCEO and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000.
Who is eligible?
Small businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 can apply. Small businesses within the City of Chicago can apply to a similar loan program here.
How do businesses apply?
Businesses will be able to complete an interest form on State of Illinois DCEO web page on Friday, March 27, 2020.
Downstate Small Business Stabilization Program
To support small businesses in downstate and rural counties across Illinois, DCEO is repurposing $20 million in CDBG funds to bolster the Downstate Small Business Stabilization Program. This Fund will offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to $25,000 in working capital. These grants will be offered on a rolling basis.
Who is eligible?
Local governments can apply on behalf of businesses with 50 employees or less. Only units of local government recognized by the Illinois Constitution and able to support economic development activities on a sufficient scale are eligible to apply for Economic Development grant funding. This includes cities, villages, and counties. A map of eligible areas of the state can be accessed here, see “Staff Contact Information.”
Chicago Small Business Resiliency Fund
Starting March 31, small businesses in Chicago can apply for low-interest loans of up to $50,000 with repayment terms of up to five years. The amount of the loan you’ll qualify for depends on your revenues before business was affected by the coronavirus.
Who’s eligible: You must demonstrate a 25% drop in revenue, have less than $3 million in revenue and fewer than 50 employees, and have no current tax liens or legal judgments.
How to apply: Apply online and include your most recent tax return, bank statements going back to October 2019 and photo ID.
Lender and Corporate Small Business Assistance Programs
Many banks have offered deferment and forbearance to business loan customers having trouble making payments. Check Forbes’ list of banks offering relief. You can also search for your bank on the American Bankers Association’s ongoing A-Z list of coronavirus response programs.
Facebook Small Business Grants Program
Facebook has committed to offering up to 30,000 small businesses $100 million in cash grants and Facebook advertising credits. The grants will be provided to businesses in more than 30 countries. Information is limited, but sign up to get more details from the company when they’re available.
We are here to help.
Please visit the Warady & Davis LLP COVID-19 Resource Center for a wealth of information on stimulus assistance, new legislation and much more. This information is updated daily. This is a rapidly evolving situation so please do not hesitate to reach out to us with any questions or concerns at 847-267-9600.