Assistance for Small Businesses Impacted by Coronavirus
Many small businesses are greatly affected by the Coronavirus pandemic. From significant losses in revenue to payroll issues, business are facing significant financial difficulties. Here are resources to help your business during this trying time.
NYC Small Business Community Loan Fund
Small businesses in New York City seeing a reduction of revenue because of Coronavirus may qualify for the NYC Small Business Community Loan Fund. Business with less than 100 employees and a decrease in sales of 25% or more are eligible for zero interest loans of up to $75,000.00, to help retain employees and ensure business continuity.
NYC Employee Retention Grant Program
New York City businesses, including non-profits, may be eligible to receive a grant that covers up to 40% of their payroll for two months. Business can access up to $27,000. The grant program is available to businesses with up to four employees and a 25% decrease in revenue as a result of Coronavirus.
New Jersey Financial Support Programs
Several new initiatives from the New Jersey Economic Development Authority includes a grant program for small businesses, a zero-interest loan program for mid-size companies, support for private-sector lenders and Community Development Financial Institutions (CDFIs), funding for entrepreneurs, and a variety of resources providing technical support and marketplace information.
DC Small Business Recovery Microgrants Program
The DC Small Business Recovery Microgrants Program offers grants to small, local businesses, individual contractors, self-employed individuals, and nonprofits located in Washington DC to meet their short-term financial needs. The grant can cover employee wages and benefits (including fringe benefits associated with employment, such as health insurance), accounts payable, fixed costs, inventory, rent, and utilities.
SBA Economic Injury Disaster Loan Program
The US Small Business Association offers low-interest federal disaster loans to small businesses and non-profits. The loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the impact from Coronavirus.
The loan amounts will be up to $2 million for a business applicant and all its affiliates. The rates for businesses will be 3.75% fixed (2.75% for non-profits) for 30 years. All loans will have a repayment term of 30 years and payments can be deferred for the first 12 months.
Proceeds may be used for working capital for business expenses, including supplies and materials, payroll, debt payments, utility, and other operational costs. Essentially, any expense that appeared in the business expenses in their financials in the past 12 months is likely eligible. Anything else, such as expanding or renovating a facility or making capital equipment purchases (vehicles or other equipment) is not eligible.
Non-profits can apply but not churches, agriculture production, gambling, or sin businesses.
In a Phase I application (which will be most businesses), the maximum loan amount will be 50% of their gross profit from their last completed year. In other words, off last year’s tax returns (Sales – Cost of Goods Sold = Gross Profit x 50% = Maximum Loan Amount).
Larger businesses can proceed to a Phase II application that will require additional documentation if they need more than $500,000.
Loans will be collateralized if over $25,000 of collateral is available, with real estate being the preferred collateral.
All 20% or more owners will fully personally guaranty the loan. Changing ownership prior to submitting the application to lower an individual’s ownership to avoid a personal guaranty could jeopardize eligibility.
No debt consolidation will be allowed. The exception would be temporary or interim loans that were taken out since the crisis started for operational expenses may be refinanced. The business can pay regular monthly debt payments as they become due
It is expected to take less than a week for approval using the scoring system after a business applies directly online (they will use tax return transcripts as well to verify applications). Targeting 30 days to close.
Businesses will be required to retain receipts and evidence of what they spent the proceeds on for a period of 3 years and may be subject to SBA Audit to insure only eligible business expenses were paid.
SBA Express Bridge Loans
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
Find an Express Bridge Loan Lender by connecting with your local SBA District Office.
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