COVID-19 Update: Small Business Loans & Grants
Relief available for small businesses impacted by pandemic shutdowns
Small businesses are currently eligible to apply for an Economic Injury Disaster Loan (EIDL) through the Small Business Association (SBA) due to Coronavirus (COVID-19). [Update: get the US Chamber’s Guide to SBA’s Economic Injury Disaster Loans.]
These loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. SBA offers loans with long-term repayments to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. If a business has several entities, each entity should apply.
New York City has created grants to assist small businesses as well. Small businesses with one to four employees can apply for a New York City Employee Retention Grant of up to $27,000 that covers 40% of payroll costs over the course of two months. Each business must show that it lost 25% of its revenue due to the coronavirus. A business that has fewer than 100 employees and experienced at least a 25% reduction in revenue, can get up to $75,000 in interest-free loans from the city to cover revenue losses.
These applications aren’t yet open, but an interest form can be filled out on the New York City Department of Small Business Services website to get more information when it’s available. Businesses must be located in one of New York City’s five boroughs, have been operating for six months or more, and have no current tax liens or legal judgments.
Philadelphia established a COVID-19 Small Business Fund designed to provide immediate relief in the form of grants and zero-interest loans to Philadelphia businesses negatively impacted by the coronavirus. A full breakdown of eligibility and amount available to each business can be found on the Fund’s website.
Need to file a claim? Get your documentation in order
Begin preparing business interruption and relief claims as soon as possible. Make sure to keep thorough documentation to support each claim including:
- Pre-crisis projections, forecasts, budgets, meeting notes, etc. that detail expected operations
- Customer and vendor correspondence regarding cancelled orders, sales, etc.
- Records of direct costs associated with any affected business process
- Time spent managing issues related to the crisis
- Orders issued by local, state or federal agencies limiting access to facilities
- Potential claim-related costs
Additional aid is on the way
KRS is constantly monitoring for additional small business relief funds and grants. We expect New Jersey, New York, and Pennsylvania to have similar funds soon and the federal aid package is still in the Senate as of this release.