Small businesses have been especially hit hard by the impact of Covid-19.  You want to continue to operate your business, pay your bills and keep your employees on payroll. How can you do that when your revenue streams have dried up? Thankfully, relief is available.  Read on to learn more about you can get access to the funds you need – now!

The CARES Act passed last Friday, the approximately $2 trillion dollar package, provides for financial assistance for small businesses. It allocates $350 billion for Paycheck Protection Program (PPP) Loans and $10 billion for Economic Injury Disaster Loans (EIDLs).

Here’s the deal regarding both programs and how you can apply for them, which I strongly suggest you do, and pronto.

Paycheck Protection Program (PPP) Loans

Under this program, the Small Business Administration (SBA) provides small business loans through local lenders. It is available to:

• Businesses and entities in operation on February 15, 2020
• Small businesses, 501(c)(3) non-profits, 501 (c)(19) veterans organizations or Tribal businesses with less than 500 employees
• Individuals who are sole proprietors, independent contractors, or self-employed
• Businesses harmed by Covid-19 between February 15, 2020 and June 30, 2020

What it provides:

• The maximum loan amount is $10 million or 250% of average monthly payroll costs
• The maximum term for the loan is 10 years
• The maximum interest rate is 4%
• Principal and interest can be deferred for 6 months to a year after the loan is disbursed

Importantly, the loan can be forgiven! So long as businesses use the loan for the following, it will be forgiven:

• payroll costs for the first 8-weeks of the relevant period (excludes compensation above $100,000)
• payment of interest on any covered mortgage obligation
• rent on an existing lease
• utilities (electricity, gas, water)

The costs that are covered by this PPP loan are:

• payroll costs
• costs regarding the continuation of group health care benefits
• employee salaries, commissions or similar compensation
• payments of interest on any mortgage obligation
• rent
• utilities
• interest on other debt incurred before the covered period (Feb. 15-June 30, 2020)

To find out more about this program which is available until June 30, 2020, go to the SBA website: https://www.sba.gov/funding-programs/loans/paycheck-protection-program

SBA provides local assistance via 68 district offices and a national network of resource partners. To find resources near you, please click here.

Economic Injury Disaster Loans & Emergency Grants

Economic Injury Disaster Loans (EIDLs) are available through the SBA until December 31, 2020. The following – with 500 or less employees – are eligible for EIDLs (so long as they were in operation as of January 31, 2020):

• Sole proprietors
• Independent contractors
• Cooperatives and employee owned businesses
• Tribal small businesses
• Small businesses
• Non-profits

What is an EIDL? It’s a lower interest loan of up to $2 million, and principal and interest can be deferred.

Important! Borrowers can get an emergency advance of up to $10,000. To access this advance, you first apply for an EIDL and then request it. The advance does not have to be repaid, so long as it’s used to keep employees on payroll, pay for sick leave, meet increased productions costs due to supply chain disruption, or pay business obligations, like debts, rent or mortgages.

Applicants can get the emergency grant even if they don’t qualify for additional funds.

Can you apply for a PPP Loan and an EIDL? Yes. However, if you receive funds under both types of loans, you must use them for different purposes or to cover different expenses. For example, if you use your EIDL to cover your payroll in April, you can’t also use PPP for payroll in April. You could use your PPP funds for payroll in May, or instead use your EIDL in April to pay rent, and your PPP funds to pay payroll in April.

To apply for an EIDL and emergency grant, go to the SBA website here: https://www.sba.gov/page/disaster-loan-applications

For assistance with the EIDL process, SBA resource partners are available to help. You can find the nearest Small Business Development Center (SBDC), Women’s Business Center, or SCORE mentorship chapter at https://www.sba.gov/local-assistance/find/