If your small business is struggling due Coronavirus there is financial assistance out there to help you keep your business running.
There are many small businesses struggling to keep their doors open during the Coronavirus pandemic. In order to stay afloat, many small business owners are looking into loans and grants to help get them through this economic crisis and avoid shutting down or letting employees go.
Below is a list of some options for SBA and government-backed loans and grants, as well as some private grants available to small businesses. Utilizing the financial assistance programs available to small businesses right now just might be the key to make sure 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 biggest difference is that a grant is money awarded to a small business that doesn’t need to be paid back while a loan eventually has to be repaid. Both can really help out a small business struggling to get through hard times.
Who Can Qualify For Small Business Grants And Loans?
The qualifications for the different grants and loans available will vary based on who is issuing the grant or loan. It’s important to check the qualifications for each grant or loan you’ll be applying for to make sure that you qualify.
Grants and Loans Available for Small Businesses
The CARES Act
Technically the CARES Act isn’t a grant or a loan, it’s actually 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 to small businesses through the CARES Act and the Small Business Association (SBA).
Economic Injury Disaster Loans
Small businesses and nonprofits who are 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.
For more in-depth information about the eligibility details and more for this loan you can click here.
SBA Express Bridge Loans
The SBA Express Bridge Loans allow a small business that already has a business relationship with an SBA Express Lender to quickly access up to $25,000. This is to provide immediate support to small businesses that are struggling due to the temporary loss of revenue. It’s a great, quick option for small businesses that have 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
In an effort to help small businesses with their debt, the SBA will cover all SBA 7(a), 504, and microloan payments for 6 months, including principal and interest. This is for the loans that are disbursed prior to September 27, 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 here.
The Paycheck Protection Program (PPP)
The Paycheck Protection Program is a Small Business Association loan that helps businesses keep their employees during the COVID-19 crisis. The purpose of this particular program is to provide incentive for small businesses to keep their workers on the 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 just 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 5 have a maturity of two years
- Loans issued after June 5 have a maturity of five years
- Loan payments will be deferred for 6 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, you can find that here.
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 of $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 following:
- 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
Nav’s Small Business Grant
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 a lot of other grants and loans out there that may work for your business.