EIDL & Other Resources is an article to assist other small business and nonprofit owners in finding some of the available financial resources to temporarily alleviate challenges posed by the COVID-19 pandemic.
99.9% of businesses in the United States are small businesses. There are 30.2 million small businesses in the U.S. employing 47.5% of the workforce – 58.9 million people, and right now, many are caught in the firestorm of current events. As we enter a new week of social distancing, isolation, and shelter-in-place, millions of small businesses and countless nonprofits, find themselves in a state of economic disaster while a healthy few have been able to move with little difficulty in remote operations.
Industries taking the biggest hits at this time are accommodation & food service, retail trade, construction, and the majority of service-related operations.
If you are a small business or nonprofit being affected financially by the current state of the U.S. economy as it enters a new week of social distancing and isolation, avenues of relief exist.
EIDL (Economic Injury Disaster Relief)
** This is an evolving area and will continue to be updated as need. **
The most notable of assistance programs right now is provided by The Small Business Administration (SBA). The SBA is offering low-interest EIDL (Economic Injury Disaster Loans) up to $2 million to small businesses and most nonprofits taking substantive financial hits as a way to help overcome temporary loss of revenue.
The EIDL interest rate is 3.75% for small businesses without credit available. Those with credit available elsewhere are not eligible.
The SBA will issue EIDL under its own authority as granted by the Coronavirus Preparedness and Response Supplemental Appropriations Act.
Currently, small businesses and most non-profits in all U.S. states and territories are eligible for EIDL.
*Small businesses owners in all U.S. states, Washington D.C., and territories are now eligble to apply for an EIDL advance of up to $10,000.
An EIDL Can Assist With:
- Retaining employees and meeting payroll demand
- Alleviating financial impact of supply chain disruptions and stalled inventory
- Paying fixed debts, accounts payable, and any other essential bills
If Ineligible for EIDL, other SBA Loans are available:
Many SBA loans exist outside of EIDL. Whether your business needs access to working capital fast or export assitance or seeking government contracts, SBA has a variety of loan options available.
- 7(a) Loan Program
- Express Loan Program
- Community Advantage Loan Pilot Program
- 504 Loan Program
- Microloan Program
- Export Express Loan Program
- Export Working Capital Program
SBA Debt Relief Program:
- The SBA will pay the principal and interest of new 7(a) loans issued priot to September 27, 2020.
- The SBA will pay the principal and interest of current 7(a) loans for a period of 6 months.
Paycheck Protection Program:
The Paycheck Protection Program is an SBA loan designed to help small businesses keep their employees on the payroll. SBA will forgive loans if all employees are kept on payroll for eight weeks and funds go to payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program is available through June 30, 2020.
- Eligbible recipients can qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional amount
- Loan payments will be deferred for 6 months
- If workforce is maintained, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses related to loan
EIDL & Other Resources: State & Local
Several state and local assistance programs are being deployed. We encourage you to visit your state and local government and Chamber of Commerce web sites for more information.
States and cities currently offering economic relief programs include:
- Los Angeles
- New Mexico
- New York City
- Rhode Island
- Salt Lake City
- San Diego
- San Francisco
EIDL & Other Resources: Private/Nonprofit Companies
Notable businesses and organizations are stepping up to the plate to lend small business and nonprofits financial assistance during these turbulent economic times.
- Amazon announced a $5 million Neighborhood Small Business Relief Fund specific to Seattle
- Facebook is offering $100 million in cash grants and ad grants to small businesses in over 30 countries
- Honeycomb Credit announced a small business relief loan program providing $10,000-$50,000 in working capital to qualifying businesses
- James Beard Foundation Food and Beverage Industry Relief Fund is providing microgrants to small, independent F&B companies
- Mainvest is offering $2000, zero-interest 120-day loans for restaurants and other brick and mortars affected by the shutdown
- Opportunity Fund is working with investors and non-profits to provide grants and low-interest rate loans to business owners in need
- SheaMoisture developed a $1 million relief fund for minority-owned businesses impacted by crisis
- Spanx donated $5 million to support women-owned businesses affected by the crisis and teamed up with Global Giving to establish The Red Backpack Fund which will provide 1000 $5000 grants to U.S. female entrepreneurs
- U.S. Chamber of Commerce Foundation, in partnership with Vistaprint, announced the Save Small Business Fund which will provie $5000 grants small businesses in the U.S. and related territories
- Wefunder launched a Coronavirus Crisis Loans program allowing small businesses to crowdfund loans from $20,000 to $1 million from supporters
EIDL & Other Resources: What’s Next?
Along with corporations offering direct financial assistance, many are using methods like waiving advertising fees, pledging money to their favored industries, and offering free products and virtual assistance.
Small businesses are the bedrock of America. Working together will help us to weather this storm together.