With the coronavirus pandemic on the rise, major economies have incurred a huge loss. Not only has this affected governments and multi-million companies, it has also adversely affected small business owners and start-ups. With mandatory lockdowns to prevent the spread of the disease, many business owners are on the verge of shutting their establishments down while trying to prevent loss as much as possible.
Any business in the first few years of its inception is like a toddler; a lot of resources are put into it, only to see it grow and prosper. But with international shipping banned, lockdown and social distancing in effect, modest business owners are having a hard time staying afloat. However, the government has done it’s best to prevent further organizations from going under. Congress has brought forth many stimulus packages and relief funds that can help small business owners cut their losses and save their business.
Sadly, many owners have reached dead ends from the federal government for assistance. But there are plenty of other sources to get funding, grants and emergency loans from state, city and local communities. Here is a list of the top federal, state and lender-centric support that is being offered to small business owners.
1. Paycheck Protection Program
An organization called the U.S. Small Business Administration or popularly known as the SBA is a government backed organization that provides monetary support to entrepreneurs, small business owners, and start-ups. The SBA has guaranteed loans of up to $10 million to eligible candidates and business owners. All the loans will be provided by lenders including various banks and other credit unions.
The government further says that the loans will be forgiven if the business consistently maintains steady payrolls for their employees with a normal salary for eight weeks and more, while using the loan money for other business resources and expenses.
2. U.S. Small Business Administration Economic Injury Disaster Loans
The SBA also has a disaster assistance program, that provides monetary assistance of upto $2 million to small businesses and other non-profit organisations that have been affected by the coronavirus pandemic. However, these loans come along with an interest rate of 3.75% for small businesses and start-ups and 2.75% for all the non profit organizations.
The loan repayment terms are not like the PPP. Here, the repayment usually varies from company to company. These payments can last upto 30 years. But the current scenario dictates that the loans will be given to businesses that have fewer than 500 employees. Also, no applicant has to provide a personal guarantee on loans under $200,000.
3. Emergency grant to SBA Economic Injury Disaster Loan applicants
Many times, businesses are denied loans even through the SBA Economic Injury Disaster method. There is however, another way to access this grant. This can be used to give employees sick leaves while maintaining payroll and meeting other ends (rent and for other resources). Any business that is denied the loan can still get upto $10,000 as an emergency grant.
There are plenty of options small business owners can explore. The IRS has eased up on their taxes until the pandemic ends, while companies like Amazon and Facebook have their own relief funds for small businesses.