Congress and the CARES Act
Every small business owner needs to seriously consider how to utilize the CARES Act and its provisions — and this is true whether or not you are currently feeling economic losses relating to the COVID-19 pandemic. There are two primary components:
Paycheck Protection Program Loan Guarantee
The new Paycheck Protection Program is being managed through the national network of more than 1,800 SBA-approved lenders. Under this program:
Applicant businesses should be under 500 employees (with some exceptions).
Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply.
Loans are given up to a maximum of the lesser of $10 million, or 2.5 times the average monthly payroll costs – including wages for employees making under $100,000, as well as expenses for paid sick leave, healthcare, etc.
No personal guarantee or collateral is required for the loan.Payments are deferred up to six to 12 months.
For this program, loan forgiveness is applicable if funds are used for payroll costs, rent, utilities, group health insurance or other healthcare costs, and some other applicable operating expenses.
There are restrictions associated with changes to workforce size or if you cut employee compensation for those making less than $100,000 per year under certain conditions.
Nonetheless, this essentially amounts to a loan that becomes a grant for most small business owners.
We partnered with BlueVine to help guide small businesses through the application process.
you can apply directly through the online portal here:
https://app.bluevine.com/signup/ppp?pid_login=0002183
For more information on how to apply for the Paycheck Protection Program, please visit: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp#section-header-4
If you have any additional questions you can check out our FAQ section.
SBA Economic Impact Disaster Loan (EIDL)
While SBA’s EIDL program predated this situation, the CARES act makes radical changes to open up what was a relatively limited program. Under the new provisions:
The EIDL program is available nationwide as every part of the country has been declared an eligible disaster area for this program.
Along with incorporated entities, the self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply
EIDLs can be approved based solely on credit score without concern for repayment ability or tax return status, nor does a prior bankruptcy disqualify an applicant.
EIDLs below $200,000 can be approved without a personal guarantee, nor is real estate likely to be required as collateral.
EIDLs are now accessible without the requirement that credit be unobtainable elsewhere, which means businesses who already have a credit line can still apply.
EIDL borrowers are in most cases are eligible to receive a $10,000 emergency grant cash advance that can be forgiven if used for payroll, paid leave or many other applicable business expenses.
EIDL has no loan fees, guarantee fees or prepayment fees.
We believe every small business should consider applying for one or both of these programs. In fact, you can apply for both types of loans, as long as they cover different expenses.
Application is directly to the SBA at https://covid19relief.sba.gov/#/
NYC Small Business Services Grant & Loan Programs
The following are details on the city’s current programs, with both grant and loan options presented.
NYC Employee Retention Grant Program
To be eligible, your business must be:
Located within the five boroughs of New York City
Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
Employ 1-4 employees in total across all locations
Have been in operation for at least 6 months
Have no outstanding tax liens or legal judgements
Application link for grant: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program
NYC Small Business Continuity Loan Fund
To be eligible, your business must be:
Located within the five boroughs of New York City
Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
Employ 99 employees or fewer in total across all locations
Demonstrate ability to repay the loan
Have no outstanding tax liens or legal judgements
Pre-application link for loan: https://www.surveymonkey.com/r/ZL5N8XL
For more information, visit https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page