Customized Remote Work Solutions From the World’s Largest Fully Remote CompanyCustomized Remote Work SolutionsLearn More
Profitability & Efficiency
6 minute read

Small Business Resources for COVID-19: Loans, Grants, and Credits

James is a chartered accountant with 20 years of experience, including strategic corporate and governance work.

Many US businesses have been forced to close due to an unprecedented pandemic affecting the entire globe. Thankfully, the government, communities, and even private businesses have stepped up to aid in these times of struggle. In order to qualify for the majority of these small business resources, you need to make sure your federal filings are up to date to ensure compliance not only in application approval but also in compliance after the program. Toptal’s turnaround consultants can help navigate these unfamiliar waters if needed.

As a contract CFO for many small businesses and budding entrepreneurs, I have seen many challenges through industry and customer changes, technology threats, and government interventions, all of which threaten the future of my clients’ businesses. Each one can be managed through planning, strategy, and a good grasp of cash flows to manage or pivot the business with a strong understanding of the “worst-case” scenario.

Key planning thoughts for small business relief aids:

  • These programs are limited in amounts of available capital, so the sooner you can start applications the better.
  • Use your existing banking relationships that you trust and know to apply for the government programs. There are a number of fraudulent third parties offering fast-tracking and do not have any better opportunities and will likely charge fees or other methods to offer support.
  • Continue to drive your business forward through these hard times. Use the extra time during your closure to work on bettering your operational strategy and social media programs, find ways to save capital and overhead in your existing operations, and look for new revenue opportunities.
  • Ensure your record-keeping is up to date. Have your accountant update bank reconciliations and interim financial statements, and ensure that your annual financials are completed.
  • Consider setting up a separate bank account for the funds and keep meticulous records of the expenditures you incur from the proceeds of these loans and facilities. Use the bank account to pay these bills and track them carefully for future audits and reviews.

Many of these funding programs appear to be straightforward or even easy, however, the majority are quite to the contrary. The following is an overview of the major federal government programs and recommendations on how to navigate them.

Resources for Small Businesses Impacted by COVID: Loans, Grants, and Credits

US Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”):

  • Details:
    • Paycheck protection program providing loan forgiveness for retaining employees
    • This loan will be 100% forgiven if employees are kept on the payroll for eight weeks and at least 75% of the amount has been used for payroll.
    • Two-year maturity loan and interest rate of 1% if not forgiven
  • Eligibility:
    • Any small business with less than 500 employees, nonprofits, and veteran organizations
  • How to apply?
    • Apply using the PDF here.
    • Complete and bring to your commercial banking manager.

Economic Injury Disaster Loans (EIDL)

  • Details:
    • Loan advances of up to $10,000 are available immediately.
    • This loan is not repayable.
    • You can apply for this, and even if you aren’t going to get approved, you get this anyway.
  • Eligibility:
    • Any small business with less than 500 employees, nonprofits, and veteran organizations
    • Sole proprietorships, with or without employees, and independent contractors all comply.
  • How to apply?

Express Bridge Loans

  • Details:
    • Companies that currently have a business relationship with an SBA Express lender can access up to $25,000 quickly.
    • Very fast turnaround to aid in bridging the time before approval for an EIDL as above
    • Can be repaid using the EIDL.
    • Rates are dependent on the bank but may be as high as Prime +6.5% maximum.
  • Eligibility:
    • Must be proven to be needed to support the survival or reopening of a small business.
    • Require a personal credit and Small Business Service Score (SBSS) for approval greater than 130.
  • How to apply?
    • Reach out to your SBA Express lender and they will provide paperwork to apply.
    • This map can help you find an SBA lender.

Stimulus Checks

  • Details:
    • The IRS is extending your filing deadline for taxes to July 15, 2020, and they are reviewing your 2018 and 2019 income tax filings.
    • You are eligible for up to a $1,200 check that will be issued and sent to you based on your income.
  • Eligibility:
    • If you earn less than $112,500 as the head of household, you get $1,200; after $112,500, they reduce the capita by $5 for every $100 in income. So, if you earn over $146,500, you don’t get a check.
  • How to apply?
    • You need to have filed your 2018 or 2019 income tax returns.
    • After that, it’s automatic.
    • You can learn more here.

Unemployment Program Enhancement

  • Details:
    • The unemployment program has been expanded from the regular “recently unemployed” to include contractors, freelancers, and self-employed individuals.
    • It also extends the initial benefit option to 13 weeks and includes an additional $600 per week on top of the regular State Unemployment benefits for four months.
  • Eligibility:
    • It’s generally available to anyone who has lost their ability to earn money right now, but self-employed individuals aren’t all qualified here, it’s on a case-by-case basis.
  • How to apply?

Private Lending and Other Offerings for Small Businesses

  • Google is offering $340 million in ad credits for small and medium businesses to stay in touch with their customers. Apply here.
  • Vogue and CFDA are repurposing the Vogue/CFDA Fashion Fund to create A Common Thread—a fundraising initiative supporting those in the American fashion community who have been impacted by the COVID-19 pandemic. Apply here.
  • Facebook has announced a small business grant that is offering $100 million in cash grants and ad credits. More information about eligibility is to be announced, but it will be available to 30,000 businesses in more than 30 countries where Facebook currently operates. Read more here and apply here.
  • Opportunity Fund, which specializes in money-lending to small businesses owned by women, immigrants, and people of color, is soon launching a coronavirus relief fund. It will provide grants and low-interest rate loans to business owners. Read about it here and stay tuned for more information.
  • James Beard Foundation is providing micro-grants to independent food and beverage small businesses in need through their Food and Beverage Industry Relief Fund. Read more here and apply here.
  • Yelp has announced a $25 million relief fund primarily focused on supporting independent local restaurants and nightlife businesses in the form of waived advertising fees and free advertising, products, and services. Read more here.
  • Hello Alice‘s Business for All offers up to $50,000 business grants and mentorships from influential leaders like Gwyneth Paltrow and Rebecca Minkoff. Read more here and apply here.
  • JPMorgan Chase is committing $8 million to assist small businesses in the US, China, and Europe. Read more here.
  • The Soze Agency, TaskForce, and Invisible Hand have created a fund in support of artists and activists who are impacted by COVID-19. They will provide $250 to selected applicants on an ongoing basis, and at the moment, they have $30,500 for the first round of grants. Read more and apply here.
  • Bumble is offering up to $5,000 in monetary support for small businesses affected by COVID-19. Download the @bumble app and use any mode to match with their Bumble Community Grants profile to learn more and apply. You can also read more and apply here.
  • Lowe’s is committing $3 million to supporting local small businesses, particularly skilled trade professionals, to continue to operate through the current conditions. Read more here.
  • Beyond its normal fundraising offerings, crowdfunding platform Mainvest has launched a $2,000, zero-interest, 120-day loan for restaurants or other brick-and-mortars affected by COVID-19. Read more here.
  • Register your business to Kabbage and Help Main Street! to enable customers to easily buy gift cards that provide critical cash support during the COVID-19 crisis.
  • Jewish Free Loan Association is granting no-fee and interest-free loans for businesses in the Los Angeles area that have been impacted by the coronavirus outbreak. Read more here and apply here.

Engaging with specialists who can navigate through the assistance programs can help reduce overall complexities and safely navigate your business through these difficult times. The support programs are here to ensure your business can survive, and utilizing them to their maximum potential is key to your success.