An overwhelming number of businesses across the U.S. are facing the financial strain of the COVID-19 pandemic after being forced to close their doors to follow quarantine laws set throughout the state, as well as social distancing practices recommended by the Centers for Disease Control and Prevention (CDC). As more consumers practice self-isolation to prevent COVID-19 from spreading, small businesses are experiencing potentially devastating financial difficulties.
Though some businesses can temporarily manage, others will have to take stronger precautions to guarantee their survival through this crisis. If you’re one of the 30 million small business owners who is concerned about the future, or you’re already struggling, there are options for financial assistance.
Today your virtual CFO in McAllen at Abigail Y. Murray CPA, LLC, can help you understand the options for financial assistance available for your business.
An Update on How the Federal Government Aims to Help Businesses
President Trump signed a new $484 billion coronavirus relief bill into law on April 24th. The legislation adds another $320 billion to fund the Paycheck Protection Program (PPP), which provides government-guaranteed loans to small businesses and adds $10 billion to the Economic Injury Disaster Loan (EIDL) program.
On March 27th, President Trump signed the $2.2 trillion economic stimulus bill into law. The package included hundreds of billions of dollars in loans to both small businesses and large companies, along with direct payments of up to $1,200 for individuals. It also included enhanced jobless aid which for the first time would also apply to freelancers and gig economy workers.
Economic Injury Disaster Loan Program
The Small Business Association (SBA) Disaster Assistance Loan Program has offered $2 million loans for small businesses and private non-profits, at rates of 3.75% for small businesses and 2.75% for non-profits for terms of up to 30 years on a case-by-case basis.
The loans can be used to pay off fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster’s impact.
Once the SBA receives an application, your local small business might have to wait four to five weeks to be approved and receive the funds. Receiving loans through this program would give gap financing of up to $35,000 to those still waiting for federal SBA loans.
The state of Texas encourages small businesses to apply for the loans online to speed up the process, since the online application is the fastest method for figuring out a company’s eligibility.
The process of applying for a city loan would be similar to the federal application process.
In regards to eligibility, the city of Austin’s proposed plan, for instance, would require a business to have at least two employees and no more than 100. Industrial, retail, or distribution companies would be eligible.
Other SBA Loans
The SBA offers a list of loan resources for small businesses to use when operating their business. More information on loans or how to connect with a lender is available when you visit the SBA website.
An SBA Express Bridge Loan, for example, permits a small business that already has a business relationship with an SBA Express Lender to gain up to $25,000 quickly. An SBA Express Bridge Loan may be a term loan or used to fill the gap while applying for a direct EIDL or other loans.
Additional Resources to Consider
There are a few other programs that could potentially provide support for your small business, which include:
- The U.S. Chamber of Commerce’s Save Small Business Fund: The Save Small Business Fund is a grantmaking initiative run by the U.S. Chamber of Commerce Foundation. The fund will provide $5,000 grants for employers across the country. They also implemented a Coronavirus Small Business Guide.
- Nav’s Small Business Grant Contest: Nav is giving grants to small businesses that tell a story of preservation and opportunity in the face of a past or ongoing difficulty. Apply by May 30th.
- Facebook’s $100M Grants for Small Businesses: Facebook is offering $100 million in grants to support over 30,000 small businesses in over 30 countries. See if your small business is eligible.
Let Us Help your Business Stay Afloat
At Abigail Y. Murray CPA, LLC, we understand that these are challenging times for small businesses like yours, and that’s why we are here to help.
Our virtual CFO can help you explore the best options for your business, and it can be done remotely for your safety.