Financial Resources for Small Businesses and the Self-Employed Impacted by Coronavirus

April 14, 2020

Last Updated: April 14, 2020

As the economic impact of coronavirus continues to unfold, more and more small businesses and entrepreneurs are finding themselves in need of financial assistance. Fortunately, there are several resources and options available or in progress that can help you endure through these uncertain times.

Federal Relief Options Administered by SBA

The CARES Act was officially signed in to law on March 27, 2020. This measure established many new resources for small businesses impacted by coronavirus. Many of which are administered by the Small Business Administration (SBA).

Paycheck Protection Program– This loan, which is forgiven if all employees are kept on for a minimum of 8 weeks, is specifically intended to help businesses continue to meet payroll but, may also be used to pay mortgage interest, rent, and utilities on the business space.

EIDL Loan Advance– The Economic Injury Disaster Loan (EIDL) program has been available since prior to the pandemic. Now, an advance of up to $10,000 will be made available within days of a successful application to employers with less than 500 employees. This includes sole proprietorships, the self-employed, and independent contractors). The advanced portion of the loan will not require repayment.

SBA Express Bridge Loans– Meant to provide a quick bridge for any business with an existing relationship with an SBA Express Lender who is applying for an EIDL. These bridge loans are up to $25,000 and will be repaid from the funds in part or in total by funds secured through the EIDL.

SBA Debt Relief – Certain types of SBA loans in good standing as of March 1, 2020 or acquired prior to September 27, 2020 will have monthly payments covered in full – including principal, interest and fees – for up to six months.

For further information on these options, visit the SBA’s coronavirus relief page

Other Bank or Private Lending Options

If you do not qualify for an SBA loan or other measures, you may be still be able to apply directly to a bank for a small business loan or bank line of credit. You may also want to investigate private lending options. Each type of financing has its own pros and cons but, you may find more flexibility with these options than with SBA loans, though the interest and terms may not be as favorable.

However, the process to be approved for an SBA loan is detailed and lengthy, will rely heavily on the business owner’s personal credit history, and often requires a business to be able to demonstrate a stable revenue stream.

Existing Financial Institutions/Investments

If you have personal or business investments or accounts, you should contact your existing financial institutions and find out what options are available to you. We have already seen some banks eliminating penalties for early CD withdrawals, for example. It is probable that additional types of investments will be available for early withdrawal or reduced penalties as the coronavirus continues to impede business-as-usual.

Business Insurance

The most applicable type of insurance which may cover loss of revenue due to coronavirus is business interruption insurance. This type of insurance is specifically designated to cover business losses due to disasters and other unforeseen/uncontrollable circumstances that force your business to close. Even if you don’t have this specific type of insurance, it is possible there are other forms of relief available to you under other types of business insurance. The only way to know for certain is to contact your insurance provider.

Facebook Small Business Grants

Facebook has pledged $100M in cash grants and ad credits for up to 30,000 businesses from the areas near where they operate. This includes select areas of 30 different countries. The basic requirements are that you are a registered small business that has been in operation for over a year and has 2 to 50 employees. Check if they are making grants to businesses from your area and begin your application here.

Federal & State Initiatives

Although federal government has already passed many relief measures, there are other proposals making their way through the legislature. Further, each state and several major cities are enacting and passing their own individual and small business protections, programs, and initiatives. Sign up for updates on your city or state websites if available and keep abreast of national and local news to stay in-the-know.

This is certainly an unnerving and uncertain time but, we are always stronger together. At Smirnova Business Consulting, we care deeply about our clients. We realize that just securing funding may not be enough to keep your business afloat. That’s why we offer a full range of business planning, consulting, and marketing services to help evaluate, reposition, and strengthen your business. If you need assistance considering your options and figuring out how your business can adapt, please contact us!