Economic Relief Available for Small Businesses
While many businesses and individuals have been impacted due to the required measures taken slow the progression of the COVID-19, small businesses are facing a unique set of struggles during this time. With many businesses being ordered to shut down and close their doors to the public, many companies are struggling to make significant revenue and continue providing employee benefits to their workforce. Fortunately, there are several programs in place at both a federal and state level to bring quick relief to applicants who qualify.
Federal Loans and Grants
Through the Coronavirus Aid, Relief, and Economic Security Act, which sets aside $376 billion for assisting small businesses and workers affected by the Coronavirus, there are several federal relief options available. The U.S. Small Business Administration has also expanded access to some of their programs. Here is information on the two main relief options currently available to American small businesses.
Paycheck Protection Program
The primary financial relief provided to small businesses through the CARES Act, the Paycheck Protection Program is put in place to help companies retain employees. To qualify, the business must have less than 500 employees or meet the SBA’s standards for industry size. Additionally, independent contractors, sole proprietors, and self-employed people can also be eligible. This program provides loans up to $10 million, which are provided by lenders at an interest rate of one percent with a maturity of two years. Payments are deferred for six months, and the loan is forgiven if the funding is used primarily for payroll and for rent, utilities, and interest on a mortgage.
Economic Injury Disaster Loan and Emergency Advance
If experiencing a loss of revenue, eligible small business owners can apply for a loan up to $2 million, which must be used for debt, payroll, and other needs. The loan term can be up to 30 years with a deferment of one year. The interest rate is 2.75% for nonprofits and 3.75% for businesses. Loan applicants can also request a $10,000 advance, which does not need to be repaid even if not approved for the loan.
In addition to the funding available at a federal level, there are several state, county, and city programs available in some areas. While the qualifications and provided assistance vary greatly in each location, business owners are able to fine additional relief through local programs
There also several grants available by various companies and foundations, which may be impacted by industry type and limited availability. For instance, fundraising platforms Hello Alice and GoFundMe have partnered with other companies to help provide additional funds to businesses financially affected by the pandemic.
Having the right health insurance broker can enable you as a small business to continue providing employee benefits to your workforce. At Sackett & Associates Insurance Services, we offer affordable small business health insurance policies that can fit your unique needs. Contact one of our representatives at 707-823-3689 to discuss what options are available today.