PPP and EIDL Loan Programs On Hold. What’s Next?
IMPORTANT NOTE: The PPP and EIDL programs are now replenished for round two. We encourage all eligible small businesses to apply now through their financial institution or through an online lender as the funds will quickly run out.
The SBA announced on April 16 that they will no longer be accepting new applications for the Paycheck Protection Program and the Economic Injury Disaster Loan. After two weeks of fulfilling requests from hundreds of thousands of business owners across the country, the relief funds have run dry. Secretary Mnuchin announced on 4/19 that Congress is very close to an agreement to re-open the PPP and it’s possible the EIDL may be replenished as well.
So what should you do now? Here are some options to consider:
- Get your 2019 accounting and taxes completed
- Pre-apply for the Paycheck Protection Program
- Explore alternative funding
Get your 2019 accounting in order and taxes completed
Many businesses have gladly taken advantage of the 90-day tax payment and filing deferral to July 15, 2020. However, getting your taxes filed will give you the official documentation you need to get approved for the PPP and EIDL if they’re reopened. (Plus, the sooner you file your return, the sooner you’ll get a refund if one is due.)
So if you want to position your business to be ready if the PPP or EIDL reopens, the best thing you can do today is to get your accounting and taxes in order.
Pre-apply for the PPP
It’s estimated that there are 800,000+ applications waiting to be processed once the PPP opens up again.
If you have not applied yet, we recommend getting your application in order today and submitting it to a PPP lender.
Right now, that’s a little tricky since many lenders have stopped accepting applications, and the official SBA Lender Match page is currently displaying no lenders.
So what should you do?
We recommend reaching out to the financial institutions you’re already a member of first to see if they’re participating. Failing that, reach out to the community banks in your city, or check out online lenders that are taking applications such as PayPal, Fundera, Kabbage, BlueVine, and others.
Explore alternative funding
If you don’t qualify for the PPP but still need cash flow to keep your operations going, here are resources we recommend looking into.
Support from government
The Save Small Business fund
The Save Small Business fund is a grant made available by the U.S. Chamber of Commerce and supporting partner companies. It provides $5,000 to small businesses with 3–20 employees.
- $5,000 grant
- Applications open April 20, 2020 at 12PM PDT
- Requires W-9 form
- Your business must be located in an economically vulnerable community. You can enter your business’s zip code on the site to see if you qualify.
You can apply here.
The employee retention tax credit
You can be eligible for payroll tax credits if you keep your employees on payroll, if you paid COVID-19-related sick leave for employees, or if you had to suspend operations.
Further reading: Employee Retention Credits and other Business Tax CARES Benefits
The Express Bridge Loan
You can borrow up to $25,000 for disaster-related purposes from a lender you have an existing banking relationship with.
Support from large businesses
Many large companies have stepped up with resources and funding for small businesses affected by COVID-19.
Facebook Small Business Grants Program
Facebook is providing cash grants and ad credit to small businesses with 2–50 employees.
- Applications will be open to cities on a rolling basis. Visit the site to see if it’s open for your city
- Must be a for-profit company that has been in business for over a year
You can apply here.
Google Ad Credits for Small and Medium-sized Businesses
Google is providing ad credits to small and medium businesses that advertised on Google in 2019. Credits will be added automatically.
Salesforce Care Small Businesses Grant
$10,000 grants for small businesses. Applications not yet open.
There are many region-specific supports and resources offering emergency funding. Check your local chamber of commerce, economic development office, or nonprofit for relief programs.
Support for your industry
Your industry organization may offer grants and specialized support. Here are a few active funding sources:
Restaurant Employee Relief Fund
The National Restaurant Association Educational Foundation is providing grants of up to $500 for impacted employees. Food delivery workers (such as those who work with Uber Eats and Doordash) are eligible.
The Photographer Fund
Format is providing up to $500 in grants to impacted photographers.
CERF+ Emergency Assistance
Up to $3,000 in grants to established artists working in a craft discipline.
Support for self-employed individuals
Federal Stimulus Checks
The federal government is providing up to $1,200 to eligible individuals. You can check the status of your payment at the IRS Get My Payment site.
Pandemic Unemployment Assistance
Self-employed individuals and independent contractors are eligible for unemployment benefits if they find themselves unemployed, partially unemployed, or unable to work due to COVID-19. Visit your state’s Department of Labor site to apply.
Banks, merchant processors, and other private lenders may offer lines of credit or other lending options. But the terms won’t be as favorable as the PPP and EIDL. One other thing: some of the below offers may have been changed due to COVID-19.
Business credit card
Using a credit card to float your business is usually a bad idea. However, some business credit cards offer 0% interest for the first year.
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.
Legal Notice: The materials communicated in this transmission are for informational purposes only and not for the purpose of providing accounting, legal or investment advice. You should contact your accountant or advisor to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an accountant-client relationship between Warady & Davis and the user or browser. You should not act upon any such information without first seeking qualified professional counsel on your specific matter. Any accounting, business or tax advice contained in this communication is not a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties. If desired, Warady & Davis would be pleased to perform the requisite research and provide you with a detailed written analysis. Such an engagement may be the subject of a separate engagement letter that would define the scope and limits of the desired consultation services. © 2020 All Rights Reserved.