The $2 trillion stimulus package passed by Congress Friday includes a portion of funding to help small businesses stay afloat in uncertain times.
The Paycheck Protection Program allocates funds for banks to directly lend nearly $350 billion in Small Business Administration-backed loans to help ensure businesses have funds to pay their employees and prevent layoffs.
Under the plan, the SBA will distribute funds which can be partially forgiven if the company or nonprofit meets specific criteria including having fewer than 500 employees. This includes gig workers such as drivers for ride-share companies.
Qualifying businesses may receive up to $10 million in loans based on employee salaries between Jan. 1 and Feb. 29 and the loans will carry interest rates up to 4%. If the company maintains the average size of its full-time workforce and uses the funds for approved purposes, the loan may be forgiven and the company will only be responsible for paying back the accrued interest.
It may be at least two weeks, however, before the bill becomes law and that money becomes available. But regulators are encouraging credit unions and banks to begin loaning to small businesses and individuals immediately.
In addition to the Paycheck Protection Program, small business owners may be able to take advantage of other programs which passed earlier in March. The Coronavirus Preparedness and Response Supplemental Appropriations Act provides more than $8 billion in emergency funding for federal agencies to address the outbreak and enables the SBA to offer $7 billion in disaster assistance loans to struggling small businesses. These loans can be used to cover typical expenses such as accounts payable, machine and equipment purchases, real estate, payroll and other bills impacted by COVID-19. For more, visit the Small Business Administration site.
Small businesses can also take advantage of resources such as online mentoring and workshops where they can ask questions related to COVID-19 through SCORE.
Some companies are also stepping up to support small businesses.
Facebook is offering nearly $100 million in grants and ad credits to businesses in 30 countries. Applications are currently being accepted and more details about the program are coming in the next few weeks.
Verizon is partnering with LISC to offer $2.5 million in grants to help small businesses fill urgent financial needs. Entrepreneurs of color, women-owned businesses and other enterprises in historically underserved communities who don’t have access to flexible, affordable capital are encouraged to apply.
Paypal is also offering relief measures to help its more than 24 million merchants around the world impacted by the coronavirus. Measures include waiving fees and deferring repayments on business loans for some of its most affected customers through the end of April.
Keap is offering nearly $100,000 in grants to small businesses. This fund is for small businesses hit hardest by the coronavirus that need a hand. Customers and non-customers can apply for a $500 “Keep Going Grant” to help them through their struggles. In addition to providing $500, Keap will give the entrepreneur a Growth Plan to help them weather the storm and get back on track. Keap is also offering free webinars on maintaining a business mindset while the economy adjusts itself.