We’ve seen some trying times before; but I have to say, this is the most trying one yet. And unfortunately, it is one that virtually no one saw coming. Airlines are grounding planes. Cruise ships are idling at sea and most of us are sheltering in place in our homes in hopes that the COVID-19 virus will soon be a memory. And it will. But before we get there, we have our businesses to think about. And unlike many of the past bailouts and stimuli packages, this one includes something for us in the Coronavirus Aid, Relief, and Economic Security Act (CARES). I don’t have a cure-all, but here are some options to make sure you and your business remain afloat.
Paycheck Protection Program (PPP) Loans
The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.
Small Business Debt Relief Program
This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
Counseling & Training
If you, like many small business owners, need a business counselor to help guide you through this uncertain time, you can turn to your local Small Business Development Center (SBDC), Women’s Business Center (WBC), or SCORE mentorship chapter. These resource partners, and the associations that represent them, will receive additional funds to expand their reach and better support small business owners with counseling and up-to-date information regarding COVID-19. There will soon be a joint platform that consolidates information and resources related to COVID-19 in order to provide consistent, timely information to small businesses.
In addition, the Minority Business Development Agency’s Business Centers (MBDCs), which cater to minority business enterprises of all sizes, will also receive funding to hire staff and provide programming to help their clients respond to COVID-19.Not every state has a MBDC. Check your State’s Labor and Industry department to find out.
Unlike past stimuli, the CARES Act provides individuals who are not already eligible for state and federal unemployment programs—but would be able to work in the absence of the coronavirus outbreak—a set amount of unemployment compensation. For example, unemployment benefits would be extended to self-employed workers, independent contractors, and those with limited work history for up to 39 weeks of employment through the end of 2020, fully funded by the federal government.
You may also be entitled to an automatic stimulus check of up to $1200 per adult which will be deposited into your bank account (or mailed) and an additional $500 per child for kids under 16 that live with you in your family. If your income exceeds $99,000 (individual) or $198,000 (jointly) you will not receive a stimulus check.
You can find details of all the above programs on the SBA Website, except Unemployment which would be through your home state’s Department of Labor.
Right now, incoming revenue is sparse for travel agencies and many homes. So it is important to take advantage of as many opportunities to stay afloat as possible. Certainly, as business owners, we have never been eligible for unemployment—seize that. It will get some income flowing to you. If you have employees, consider the PPP loan and the forgiveness. Look to SBA disaster loans, but make sure you are able to deal with the terms; you don’t want to end up with a struggling business and a untenable loan repayment. And finally, look to your own state for assistance. In Maryland, the Governor set up a $70M fund and is issuing out $10,000 grants to businesses who qualify. $10,000 will not make it all better, but it will pay the rent, insurance and utilities until we can come out on the other side.
Remember, this COVID-19 virus will not discriminate and we are quite literally all in this together. None of us have ever experienced a circumstance like this. It is all uncharted waters and we are (as the phrase goes) building this plane as we fly it. There has NEVER been a more important time to make sure you and your business have the resources to survive. The best defense is knowledge; so be sure to keep up on what resources are available now and what may become available as we all navigate through this.
Other than that…stay healthy…keep your distance…wash your hands…and stop touching your face!