If you are a business owner and you are struggling due to COVID-19 you are not alone. The national unemployment rate is expected to exceed 30% this week, the highest it has ever been (even during the Great Depression).
We are in for some difficult times ahead but fortunately legislation passed in Washington offers a lot of help for struggling small businesses which are broken down for you below.
Paycheck Protection Program
Part of the CARES Act, the Paycheck Protection Program provides small businesses with funds to cover up to 8 weeks of payroll costs. Funds are provided in the form of government-backed SBA loans that will be fully forgiven when used to pay employees, rent, utilities, and mortgages.
At least 75% of the forgiven funds must be used on payroll costs including benefits. Loan payments will be deferred for six months and their are no fees charged by either the lender or the government.
The application period opens on April 3rd through any existing SBA 7(a) lender or federally insured banks and credit unions. You can read more about the Paycheck Protection Program here.
SBA Disaster Loans
Typically disaster loans are reserved for businesses affected by events like flooding or hurricanes. However, the coronavirus is now considered a disaster by the SBA which means you can apply for these low-interest loans through the SBA COVID-19 website.
$10,000 Emergency Grants
Another perk of the CARES Act is the $10,000 emergency grant which will supposedly pay out within 3 days of application. It is a grant which means it does not have to be paid back and it is available through the SBA disaster loan mentioned above.
Family First Coronavirus Response Act
As an employer, the Family First Coronavirus Response Act (FFCRA) is a little scary. It requires you to provide employees up to 2 weeks of paid sick leave to employees who are unable to work due to quarantine.
The good news is the federal government will be providing you with tax credits to help cover the costs so make sure you document everything. Also, businesses with fewer than 50 employees are exempt if it threatens the viability of your business. You can read more about the FFCRA here.
Get a Mentor
This is a lot of information, and we haven’t even begun to look at state and local programs yet. If you are feeling overwhelmed and looking for guidance you can request a business mentor through SCORE or your local Small Business Development Center.
Mentors are available to assist you remotely so you can talk to them without breaking quarantine.
You are not alone. We are all in this together.