For small businesses that have not looked into the recently announced Coronavirus Aid Relief and Economic Security (CARES) Act loan programs, I urge you to stop and do so, right now. The goal of the government is to get these loans into the hands of small business owners as quickly as possible to help keep them going and be able to continue paying their employees as they navigate the COVID-19 outbreak.
There are two loan programs that I want to highlight here.
First, the Small Business Association (SBA) is offering disaster assistance through low-interest loans to businesses affected by COVID-19 through the Economic Injury Disaster Loan (EIDL).
- The maximum EIDL is $2 million
- EIDL terms can be up to 30 years at 3.75 percent
- The EIDL now provides an opportunity to get up to a $10,000 advance on a loan application within three days.
- If an EIDL application is declined, the $10,000 will be converted into a grant.
You can apply at sba.gov/disaster as soon as possible to fill out a new, streamlined application.
There’s also the Paycheck Protection Program (PPP). The CARES Act allocated $350 billion through the PPP to help small businesses keep their workers employed during the COVID-19 outbreak.
- These loans can be up to 2.5 times the borrower’s average monthly payroll costs (not to exceed $10 million) and can be used for a variety of expenses.
- If all employees are kept on payroll for eight weeks, the SBA will forgive the portion of the loans used for payroll, rent, mortgage, interest, or utilities.
- Up to 100 percent of the loan is forgivable.
Paycheck Protection Program loans will be made through banks. So, if you are interested in applying, contact your bank for the application process, as soon as possible. Also, if you have general questions about either the EIDL or PPP program, you can reach out to the Chamber’s economic development director, Tyler Rossmaessler at .
We know that the coronavirus outbreak is affecting small businesses in a variety of ways – from loss of business to remote work, things are changing fast and forcing owners to adapt their business models and staffing levels. Know that the Chamber is working your behalf with our local, state and federal partners to develop and/or identify ways to help businesses stay afloat during this challenging and uncertain time.
We also encourage you to visit flintandgenesee.org to subscribe to the Chamber’s COVID-19 Resources e-newsletter and regularly visit the Coronavirus Resource webpage to get the latest information on the programs and support available for small businesses impacted by the virus in Michigan.
Take care,
Tim