This post was contributed by our partners at Bench.
If your small business has been impacted by COVID-19, you have financial options. From federal loans to local grants, here’s a walkthrough of available resources to help your business stay afloat.
For any loan or grant application, we recommend getting your 2019 bookkeeping and taxes completed. This will put you in the best position to secure funding, and be eligible for loan forgiveness where applicable.
Have any questions at all about financing, bookkeeping, or taxes? Reach out to Bench and learn more.
Federal government relief
Paycheck Protection Program
Weren’t able to get funding during the first round of the Paycheck Protection Program? Good news: an additional $310 billion of funding has been approved by the federal government. This newly updated bill makes additional guarantees that at least $60 billion must be granted by small banks, community financial institutions, and credit unions to ensure that truly small, local businesses get a chance at funding.
- The funding is meant to help retain workers, maintain payroll, and cover rent/mortgage/utility expenses.
- Small businesses, sole proprietorships, independent contractors, and self-employed individuals can all qualify.
- The loan covers expenses dating back to February 15, to June 30, 2020.
- The loan can be forgiven and essentially turned into a non-taxable grant.
These low-interest federal disaster loans for small businesses quickly ran out of funding in its first round. The newly approved bill provides an additional $60 billion to the program, including $10 billion to the EIDL emergency grant.
- The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million.
- You can use this loan for typical day to day expenses such as mortgage payments, payroll, accounts payable, utility payments, or vehicle payments.
- You cannot use this loan to refinance existing debt, to replace lost sales or profit, or fund purchases of equipment, vehicles, and supplies.
- Loans that exceed $25,000 must be secured by collateral. The SBA will not decline a loan if you don’t have enough collateral but will ask for whatever collateral is available, which may include real estate owned by a business’ principals.
Further reading: How to Get an SBA Disaster Loan
SBA Express Bridge Loans
Applied for an SBA disaster loan but need cash, now? The Express Bridge Loan Pilot program authorizes SBA Express Lenders to provide emergency loans in amounts up to $25,000 while your small business applies for and awaits long-term financing through SBA’s direct Disaster Loan Program.
There is a catch, though—your small business must have an existing business relationship with an SBA Express Lender. Check with your banking institutions to see if they offer SBA Loans.
- The small business must have an existing relationship with the funding bank prior to March 13, 2020.
- Up to $25,000 in funding.
- Fast turnaround.
Further Reading: The Express Bridge Loan Pilot Program (A Simple Guide)
Employee Retention Tax Credit
You can be eligible for payroll tax credits if you keep your employees on payroll, if you paid COVID-19-related sick leave for employees, or if you had to suspend operations.
- Employers with fewer than 500 employees are eligible for payroll tax credits, if they keep their employees on payroll throughout the COVID-19 crisis.
- These tax credits can significantly lower your tax bill.
- You cannot qualify for these tax credits if you’re also applying for the Paycheck Protection Program.
- Relief is available for qualified wages paid after March 12, 2020, and before January 1, 2021.
Further Reading: Employee Retention Credits: A Simple Guide
If you’re unable, or not eligible, to receive federal funding, make sure you check your local chamber of commerce, economic development office, or nonprofit for relief programs.
Further Reading: COVID-19 Resources, State by State
Explore alternative resources
If you’re unable to receive funding from the federal or state government to get your business through COVID-19, there are alternative resources available. Many large companies and industries have stepped up for the small business community, and we encourage you to look within your professional network for available grants. Here are some options we recommend:
Facebook Small Business Grants Program
Facebook is providing cash grants and ad credit to small businesses with 2–50 employees.
- Applications will be open to cities on a rolling basis. Visit the site to see if it’s open for your city.
- Must be a for-profit company that has been in business for over a year.
The Photographer Fund
- Format is providing up to $500 in grants to impacted photographers.
CERF+ Emergency Assistance
- Up to $3,000 in grants to established artists working in a craft discipline.
Google Ad Credits for Small and Medium-sized Businesses
- Google is providing ad credits to small and medium businesses that advertised on Google in 2019. Credits will be added automatically.
Further Reading: The PPP and EIDL Are Closed. Now What?
Use this link and you’ll get 20% off your first six months of bookkeeping and record-keeping support.
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