Financial aid available for small businesses hurt by pandemic – apply now before the money runs out
If you own a small business that’s facing economic hardships due to the coronavirus pandemic, several new federal programs could provide a lifeline.
The office of Rep. Gerry Connolly (D-Va.) has prepared a guide on the assistance available to small business under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and other sources. These programs have tight deadlines, so businesses should apply right away.
The Paycheck Protection Program from the Small Business Administration provides 100 percent federally guaranteed loans to help businesses and nonprofits with fewer than 500 employees maintain their payroll during the COVID-19 emergency. If employers maintain their payroll, the loans would be forgiven.
Loans are available through June 30. The maximum loan amount is 250 percent of the employer’s average monthly payroll costs between Feb. 15 and June 30, up to a maximum loan amount of $10 million. The maximum term limit is 10 years, and the maximum interest rate is 4 percent. There are no loan or prepayment fees.
It’s urgent to apply for a Paycheck Protection loan as soon as possible, as the program is likely to run out of funds before the June 30 deadline.
The Coronavirus Preparedness and Response Supplemental Appropriations Act provides approximately $7 billion to the SBA for Economic Injury Disaster Loans and Emergency Economic Injury Grants for businesses that suffer substantial harm due to the pandemic. Small businesses and nonprofits can apply for a grant up to $10,000 within three days after applying for a loan.
Grants do not need to be repaid. They can be used to keep employees on the payroll, pay for sick leave, meet increased production costs due to supply chain disruptions, and cover debts, rent, and mortgage payments.
Economic Injury Disaster Loans are for working capital for fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the pandemic. They do not cover lost sales. The maximum amount is $2 million. Principal and interest can be deferred for up to four years. The interest rate is 3.75 percent for small businesses and 2.75 percent for non-profits.
Congress also passed the Families First Coronavirus Response Act, which gives businesses with fewer than 500 employees funds to cover employees’ paid leave for their own or family members’ healthcare.
The act also provides a refundable payroll tax credit to employers to cover 100 percent of the cost of wages for employees on leave and a refundable income tax credit for self-employed individuals.
Connolly says the act enables employers to keep workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat coronavirus.
For more information on any of these programs, call Connolly’s office in Annandale at 703-256-3071.
The Virginia Small Business Development Center has issued a comprehensive COVID-19 guide that offers information on other loan opportunities, unemployment benefits, and other resources for small businesses. Find your local office here.
The State of Virginia has issued a new rule stating that employers who slow down or cease operations due to COVID-19 will not be financially penalized for an increase in workers requesting unemployment benefits.
Virginia changed its unemployment guidelines to allow laid off workers to apply for benefits without having to undergo the usual one-week waiting period. The maximum weekly benefit amount in Virginia is $378. File a claim here or call 866-832-2363.
Just a thought… I believe more and more testing is the urgent key to dealing with COVID=19. Blood donations are critically needed.
Why not offer testing and results while donating?
I applied for small business relief the first day I possibly could and have heard absolutely nothing back yet.
good