The Coronavirus stimulus bill – called the CARES Act – is now open for applications from small businesses. Handling this financial crisis is hard enough for your business, so we’ve simplified the process by giving you the lowdown on each aid program available.
Below you’ll find the four CARES programs, plus some tips for each one. 755,476 EIDL emergency grants have already been processed – hopefully you’ll be next.
Not sure which to apply to? Go straight to our flowchart on how to decide what you may be eligible for.
1. Paycheck Protection Program
• Loans to keep the workforce employed. It can be used to cover payroll, rent, mortgage interest, or utilities. (With 75% required for payroll).
• Open to a wide range of self-employed people and small businesses, almost always under 500 employees.
• The loan will be fully forgiven.
• Apply via your local lender.
The Paycheck Protection Program is great for keeping your workers on board at least for the near term. Protip: Even if you’ve already laid off workers, you can rehire them and then apply for the Paycheck Protection Program.
2. SBA Debt Relief
• For small businesses in debt and/or struggling to pay off current SBA loans.
• Loans must be 7(a), 504 or microloans.
• No application necessary: SBA Debt Relief will automatically be applied for the next 6 monthly payments.
Great news! If you already have a loan with SBA, this debt relief will automatically be applied for your business loan.
3. Economic Injury Disaster Loan (EIDL)
• $10,000 of economic relief for businesses experiencing temporary loss of revenue.
• For small businesses with fewer than 500 employees (or those that follow SBA’s size standards).
• The loan advance will not have to be repaid.
• Apply via SBA.
EIDL has received some criticism because it takes a while to process and pay out. In addition, applications were recently suspended, but SBA should soon be reopened to applicants.
4. SBA Express Bridge Loans
• Available for those who have applied for the EIDL loan, but need the money ASAP.
• Applicants must have a prior relationship with a SBA Express Lender.
• $25,000 available with a quick turnaround.
• Loan will be covered in full or part by the EIDL loan (once approved).
• Apply via SBA.
SBA Express Bridge Loans are an excellent way to cover costs in a pinch, though applicants must have a prior relationship with a SBA Express Lender. They must also have already applied to the EIDL loan.
Besides the federal Coronavirus stimulus, many states, banks and corporations are providing aid. Protip: Whenever you’re applying to a loan online, make sure you’re visiting the official, secure site. There has been an uptick in fraud schemes during COVID-19.
Here are some of our favorite resources:
• State contracts for programs
• Banking programs
• Chamber of Congress guide
• CARES Act programs
We wish the best for your small business. While you’re waiting for your loan to be processed, check out more tips to cut costs during COVID-19!