Small Business Loans and Grants During Coronavirus

Small Business Loans and Grants During Coronavirus

Aileen Barker

by Aileen Barker
Senior Contributing Writer

July 31, 2020
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Small Business Loans and Grants During Coronavirus

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If your small business is struggling due Coronavirus, there is financial assistance available to help you keep your business running.

Many small businesses are struggling to keep their doors open during the Coronavirus pandemic. To stay afloat, many of these small business owners are applying for loans and grants to help get them through this economic crisis and avoid shutting down or letting employees go.

Below is a list of Small Business Administration (SBA) and government-backed loans and grants available. Utilizing these programs might be essential to ensuring your business stays in operation and can survive the pandemic.

What's The Difference Between A Loan And A Grant?

While loans and grants are different, both can be beneficial for small businesses. The most significant difference is that grant money doesn't need to be paid back, whereas a loan eventually must be repaid. Both can provide help if your business is struggling to get through hard times.

Who Qualifies

The qualifications for the different grants and loans available will vary based on who is issuing the grant or loan. It's essential to check each grant or loan's qualifications before applying to make sure that you qualify.

Available Grants and Loans

The CARES Act

Technically the CARES Act isn't a grant or a loan; it's a program. The CARES Act established several temporary programs to assist small businesses during the COVID-19 outbreak. Several of the financial assistance programs listed below are available through the CARES Act and the Small Business Association (SBA).

Economic Injury Disaster Loans

Small businesses and nonprofits experiencing a loss of revenue can apply for an Economic Injury Disaster Loan. The loan is intended to be used for a variety of working capital and operating expenses like rent, utilities, health care benefits, and fixed debt payments.

In addition, those who apply for the EIDL can apply for the Emergency Economic Injury Grant. This grant provides an emergency advance of up to $10,000 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL) for those businesses and nonprofits who need quick cash.

More in-depth information about the eligibility details and more for this loan is available on the SBA website.

SBA Express Bridge Loans

The SBA Express Bridge Loan allows a small business that already has a business relationship with an SBA Express Lender to access up to $25,000 quickly. This can provide immediate support to small businesses that are struggling due to the temporary loss of revenue. It's a great, quick option if your business has an urgent need for funds and can also be applied for while waiting for loans or grants that take longer to get.

More information on SBA Express Bridge Loans can be found here.

SBA Debt Relief

To help small businesses with their debt, the SBA will cover all SBA 7(a), 504, and microloan payments for six months, including principal and interest. This is for the loans that are disbursed prior to September 27th, 2020. However, this doesn't apply to Paycheck Protection Program loans or Economic Injury Disaster loans.

The great thing about this is that borrowers don't have to apply. The SBA has notified 7(a), 504, and Microloan lenders, and the lenders have been instructed to stop collecting payments from borrowers.

More information on the SBA Debt Relief program is available on their website.

The Paycheck Protection Program (PPP)

The Paycheck Protection Program is a Small Business Association loan that helps businesses keep their staff employed during the COVID-19 crisis. The purpose of this particular program is to provide an incentive to keep workers on payroll. This helps to keep businesses running while also keeping as many people employed as possible.

Although this program was originally set to end on June 30th, 2020, the deadline to apply has since been extended to August 8th, 2020. To apply, you have to find an existing SBA lender and go through the application process.

PPP Loan details
  • PPP loans have a 1% interest rates
  • Loans issued before to June 5th have a maturity of two years
  • Loans issued after June 5th have a maturity of five years
  • Loan payments will be deferred for six months
  • No collateral or personal guarantees are required
  • There will be no fees charged by lenders or the government

If you want more detailed information about the Paycheck Protection Program and who can apply, visit their website.

Veteran Small Business Award Grant

The StreetShares Foundation (in partnership with Samuel Adams Brewing, the American Dream program, and the Virginia Department of Veterans Services) awards the Veteran Small Business Award each year. This program grants three awards in the amounts – $15,000, $6,000, and $4,000 – to three veteran small businesses who have gone through the application process.

Applications are evaluated based on the criteria listed on their website:

  • Social impact on the military community
  • Personal story and business idea/potential
  • What customer needs are being filled
  • Team and company history
  • Plans for how to use the award
  • Potential impact for the award

If you haven't heard, Nav is a free service that gives business owners the fastest, easiest, and most trusted path to financing.

Each year Nav awards two businesses with grants to take their businesses to the next level. The first place award receives $10,000 while the runner-up receives $5,000.

You can view information about applying for Nav's Small Business Grant on their website.

Loans and grants are great options to support your business during tough times. In addition to the programs outlined above, there are many other grants and loans out there that may work for your business.

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