Emergency Business Loans and Resources For the Coronavirus Pandemic

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The coronavirus (COVID-19) pandemic is a developing situation. More resources will be added here as they become available.

As states and municipalities shutter certain businesses and tell residents to stay home due to the coronavirus pandemic, many small business owners face an uncertain future with fewer or no customers to serve. Half of business owners don’t expect to make it past three months, according to a study from Axios.

Help is available:
There are small business loans and other resources to handle COVID-19 disruptions and losses. If you must shut down your business for good — or temporarily — we have strategies and tips for that, too.

Emergency business loans

Several types of emergency financing are available for general business needs or specifically dedicated to businesses affected by COVID-19. Here are some options ranging from government assistance to private financing.

SBA disaster loans

The U.S. Small Business Administration (SBA) opened its Economic Injury Disaster Loan Program to businesses affected by the coronavirus. The program is now open to all states and U.S. territories, including Guam, Puerto Rico, U.S. Virgin Islands and American Samoa.

Small businesses and nonprofits severely affected by COVID-19 can visit the SBA website to apply for low-interest working capital loans up to $2 million.
• Check the SBA’s COVID-19 assistance page for updated resources and guidance.
• Keep track of areas that become eligible for SBA disaster assistance.

Economic Injury Disaster Loans, or EIDLs, are reserved for business owners, homeowners and renters in areas where a state-declared disaster has occurred. They are different from physical disaster loans available after storms or other natural disasters. EIDLs have repayment terms up to 30 years and a maximum 4% interest rate.
• Learn more about SBA disaster loans

Do I qualify for expanded SBA financing?

To be eligible, your business must be located in one of the states designated to receive funding due to COVID-19. You also must meet the SBA’s general requirements, which include being a ”small” business based on average annual receipts or average number of employees as well as:
• Not receiving funds from any other lender, and
• Being able to repay debt based on projected cash flow.

The SBA typically reviews disaster loan applications within four weeks, and it would take five days after signing loan closing documents to receive funds. Keep this timeline — which may be longer or shorter depending on your circumstances — in mind when applying for funds
• Continue reading about how to get an SBA loan

Federal Reserve

The Federal Reserve announced it would establish a Primary Dealer Credit Facility to help banks and the broader financial system secure funds to provide credit to struggling businesses. Details are forthcoming, but essentially, the program provides large financial firms or primary dealers with collateral in exchange for opening up sources of funding to small businesses. A similar program was used during the 2008 financial crisis.
• Read more about the Fed’s response to COVID-19

Online business loans

As opposed to government-backed or even bank loans, online business lenders, on the other hand, typically offer fast approval, fewer credit restrictions and may even provide same-day funding. Short-term or long-term business loans are available from online lenders. Short-term loans must be repaid in three to 18 months and generally have higher interest rates than long-terms loans, which could be repaid in three to 10 years. Business owners can apply for financing directly through an online lender’s website.
• Take a look at our top picks for online business loans

Other emergency financing:
In addition to loans, you could apply for several types of business financing with fast turnaround times:
Merchant cash advances
Invoice factoring
Business line of credit

These options, also from online business lenders, could be available to use within a week — or hours — and provide different types of repayment schedules. Make sure your choice reflects the current state of your business. Some products, like merchant cash advances and invoice factoring, require repayment taken directly from your daily sales. Be mindful of repayment terms if you’re experiencing a slowdown.
• Learn more about emergency business financing

Assistance programs

A growing number of companies have pledged to provide funding for struggling businesses during the coronavirus pandemic.

Facebook:

The social media company is offering $100 million in cash grants and Facebook ad credits. Facebook is not yet accepting applications, but you can sign up online to receive updates about the program as they become available.

Amazon:

Amazon has allocated $5 million to create the Neighborhood Small Business Relief Fund to support businesses in Seattle. Grant recipients must employ fewer than 50 people and generate less than $7 million in annual revenue. Seattle-area businesses owners can apply online for a grant.

Kabbage:

As a way to help small business owners nationwide generate income, online business lender Kabbage is allowing business owners to sell gift cards through the platform. Business owners can sign up for Kabbage Payments to offer customers online gift certificates from $15 to $500.

Federal small business relief

Several federal agencies have taken steps to provide relief for small businesses during the COVID-19 outbreak.

Internal Revenue Service

The IRS and the U.S. Treasury Department issued guidance to allow individual and non-corporate tax filers to defer up to $1 million of federal income tax payments, including self-employment tax. Corporate taxpayers can defer up to $10 million of federal income tax payments. The April 15 filing and payment deadline has also been extended to July 15 without interest or penalties. Your state taxes may still be due April 15 — check with your state government website(s) for more information.

Visit the IRS coronavirus tax relief page for more resources

U.S. Department of Labor

The U.S. Department of Labor is providing $100 million in Dislocated Worker Grants to assist dislocated or laid-off workers, as well as self-employed businesses owners who are unemployed or underemployed as a result of the COVID-19 pandemic. The grants will provide disaster-relief employment and employment training activities for eligible participants.

Find more coronavirus resources from the U.S. Department of Labor

Congress

In addition to the already-passed Coronavirus Preparedness and Response Supplemental Appropriations Act and Families First Coronavirus Response Act, Congress is considering a stimulus package that would provide more loans to small businesses plus a payroll tax holiday.

City and state help for small businesses

Several states have unveiled programs to support affected small businesses.
Here’s a look at what’s offered in states that the coronavirus has hit the hardest so far.

California:

New York City:

Businesses with fewer than 100 employees that have seen a 25% decrease in sales are eligible for zero-interest loans up to $75,000 from the City of New York. Small businesses with fewer than five employees are also eligible for the city’s grants to cover 40% of payroll costs for two months.

 

Seattle:

Businesses that have lost income due to COVID-19 can apply for grants up to $10,000 from the City of Seattle. Business owners must earn less than 80% of the area’s median income to be eligible, and must have five employees or fewer and a physical business location. Grants can be used to cover daily operating expenses, such as rent and payroll.

 

Wisconsin:

The Wisconsin Economic Development Corporation has put together the Small Business 20/20 program to support small and microenterprises during the coronavirus pandemic. The program provides grants up to $20,000 to businesses with no more than 20 employees to help cover daily expenses and employee leave related to COVID-19.