Help for Small Businesses
Coronavirus (COVID-19): Small Business Guidance & Loan Resources:
U.S. Small Business Administration programs range from large loans to a $10,000 Disaster Loan Advance that does not require repayment. The application is short and small businesses are encouraged to apply ASAP
- Paycheck Protection Program
- Economic Injury Disaster Loans and Loan Advance
- SBA Debt Relief
- SBA Express Bridge Loans
- Guidance for Businesses and Employers
- SBA Products and Resources
- Government Contracting
- Local Assistance
Paycheck Protection Loan (PPP)
The Paycheck Protection Loan (PPP) is a loan offered by the Small Business Administration of up to $10 million each to cover payroll and some other costs. This loan is part of the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, with $349 billion designated for the PPP. The loans feature a streamlined application process, less documentation and fewer restrictions.
Any small business with fewer than 500 employees may be eligible. This includes small businesses, sole proprietors, S corporations, C corporations, LLCs, independent contractors, self-employed people and private nonprofits. In addition, some nonprofits, tribal groups and veteran groups are eligible.
Restaurants and hospitality businesses may qualify if they have fewer than 500 employees per location. Details on the size standards and exceptions are on the SBA website.
Ineligible businesses include those engaged in illegal activities, owners more than 60 days delinquent on child support obligations, farms and ranches, sex businesses, lobbyists and gambling establishments.
The government’s efforts to help businesses has resulted in generous terms for PPP loans. Borrowers can receive two and a half times their monthly payroll costs incurred during the year before the date the loan is made. For example, if your monthly average payroll in the last 12 months is $10,000, you may borrow up to $25,000. The maximum any business can borrow is $10 million.
The money can be used for payroll – no more than $100,000 annual salary per employee – as well as benefits (including paid sick leave and insurance premiums) and taxes on compensation. Up to 25% of the loan may be used by the business to cover mortgage interest, rent, utilities and interest on pre-existing loans.
The covered expenses have to be incurred from Feb. 15, 2020 through June 30, 2020. Businesses have to have been in business by Feb. 15, 2020.
Any portion of the loan that is not forgiven will carry an interest rate of 1.0% and is due to be paid back within two years. However, payments for the first six months can be deferred. There’s no pre-payment penalty.
Borrowers will have their loans forgiven if they use the money for designated expenses. Participants are eligible for loan forgiveness for the amounts spent over the eight weeks after receiving the loan.
The amount of forgiveness is equal to the total amount of payments for payroll, mortgage interest, rent and utilities. It is anticipated that no more than 25% of the forgiven amount may be for non-payroll costs.
To get the entire amount of the loan forgiven, the full-time employee headcount cannot decline, nor can employers cut salaries or wages.
The SBA will use a sliding scale to reduce the amount eligible for forgiveness depending on how many employees are retained. If businesses rehire laid off workers by June 30, they won’t be penalized.
Another provision of the program allows borrowers who already have disaster assistance loans to defer payments through Dec. 31. This is an automatic deferment. Borrowers don’t have to do anything to qualify for it.
How to Apply?
Small businesses and sole proprietorships were able to apply for PPP loans starting April 3. Independent contractors and self-employed individuals, including freelancers, can apply beginning April 10. The program ends June 30, though borrowers are encouraged to apply as soon as possible.
Borrowers can apply to any SBA-approved lender, including participating commercial banks and credit unions. A list of approved lenders can be found on the SBA website. Note that many lenders may limit eligibility to those businesses with whom they have a preexisting relationship, such as previous loans or a business checking account.
The program also provides for waivers that would normally be applied to SBA loans. Those include waivers for fees charged to borrowers and lenders, as well as prepayment fees. A requirement that borrowers also have credit elsewhere is likewise being waived for this program. There are no requirements for collateral or personal guarantees.
Businesses can complete an online application at the SBA website. The SBA estimates the application process should take about two hours and 10 minutes. However, this is assuming all required documents are available. It may take a few days to gather the necessary paperwork.
The SBA says applications will be evaluated the same day they are received. However, details about how this will work are not finalized and loan application volume is expected to be heavy.
The Payroll Protection Program aims to loan up to $349 billion to small businesses and independent contractors who maintain employee count during the COVID-19 crisis. The lending program uses a streamlined, low-documentation process and promises quick turnaround. And, if qualifying employers don’t lay off employees or cut wages, the loans can be forgiven, effectively making this a grant.
Click here for the list of lenders: https://www.sba.gov/article/2020/mar/02/100-most-active-sba-7a-lenders
Article taken from smartasset.com – April 4, 2020
Restaurant Employee Relief Fund
Fund will provide grants to restaurant industry employees who have been adversely impacted by COVID-19 financially, whether through a decrease in wages or loss of employment that results in a lack of resources to pay for essential expenses. Grants of $500 per person are available. https://rerf.us/apply-for-aid/
Economic Injury Disaster Loans and Loan Advance
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
To apply for a COVID-19 Economic Injury Disaster Loan,
- HFLA COVID-19 Emergency Loans: Emergency, interest free loans up to $1500 for lost wages due to inability to go to work, child care costs due to school closures, small business losses, related medical costs: https://interestfree.org/
- FHA Resources for people struggling to make mortgage payments in emergencies:
- CORONAVIRUS and Unemployment Benefits: If you are laid off, work closes, or if you become sick and need to miss work:
Bartender Emergency Assistance Program: https://www.usbgfoundation.org/beap.
Ohio Liquor Buy-Back
A bar or restaurant may return unopened high proof liquor products purchased within the last 30 days (on or after February 13, 2020)
- To return, a bar/restaurant or F2 permit holder needs to bring the unopened high proof liquor product back to the liquor store they purchased the product.
- The Agency will call the Liquor Enterprise Service Center (LESC) for approval. Approval is immediate, but awareness of the return is necessary.
For questions or more information regarding the one-time high proof liquor buy back, please feel free to contact the LESC at 877-812-0013 or OhioLiquorInfo@com.ohio.gov
Honeycomb Credit COVID-19 Relief Program
To help deliver the working capital that businesses need, Honeycomb is offering 45-day payment free periods, 6-month interest-only periods and reducing our posting, success, and investor fees. We’re also streamlining our due diligence to connect businesses with local investors as quickly as possible. As always, these loans are community funded via the Honeycomb crowdfunding platform. More information here
HFLA of Northeast Ohio
In light of the financial burdens created by the spread of COVID-19, the Hebrew Free Loan Association (HFLA) is offering expedited interest-free loans of up to $1,500 for purposes including (but not limited to):
- Lost wages due to inability to go to work
- Child care costs due to school closures
- Small business losses
- Related medical costs
To apply, borrowers should contact HFLA at 216-378-9042 or email firstname.lastname@example.org Brady@interestfree.org specifying that the request is for coronavirus related needs. If you need more funds you may be eligible to apply for HFLA’s standard interest free loan (up to $10,000 with a guarantor)
SBA Economic Injury Disaster Loan Program
The Ohio Development Services Agency is preparing to submit an application in the coming week to qualify Ohio for the U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan Program. This program provides low-interest loans up to $2 million in order to help businesses overcome the temporary loss of revenue during the state of emergency. In order to complete the state’s application, businesses impacted by the current public health crisis should immediately send their contact information to BusinessHelp@Development.Ohio.gov. Additional information on the SBA Economic Injury Disaster Loan Program is available at SBA.gov/Disaster.