Resources for Small Businesses to Survive COVID-19

Guide to CARES Act Loans and Guidance

By Emily Elmore | 9 April 2020

Small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. The CARES Act contains $376 billion in relief for American workers and small businesses. Let’s nav.igate the benefits available to you.

Coronavirus Relief Options

Select the program for overview, eligibility, and application.

Paycheck Protection Program

This loan program provides loan forgiveness for retaining employees by temporarily expanding the traditional Small Business Association 7(a) loan program.

EIDL Emergency Advance

This is the “economic injury disaster loan advance” and it will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.

SBA Express Bridge Loans

Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.

SBA Debt Relief

The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.

You can also get FREE business counseling from an SBA representative near you. Search here. 

There’s a lot to think about besides access to capital. Other common issues a SBO needs to consider are:

  • Workforce Capacity 
  • Inventory and Supply Chain Shortfalls
  • Clean-Up Costs
  • Insurance Coverage
  • Market Demand
  • Marketing
  • Planning 

Many businesses are in the thick of decision-making regarding each one of these items. For additional information and guidance on preparing and protecting your workforce, cleanup, and planning, visit the CDC Guidance for Businesses and Employers to Plan and Respond to COVID-19.

Research, Marketing, and Supply Chain

For these questions you can get free resources from the SBA, which will provide you with market data and help you make a beneficial pivot if necessary. Besides regional and district offices with counselors on hand, there are also disaster field offices and resource partners who can help you with your specific industry. Some of these partners include:

SBDC

A network of centers that provide counseling and training to help small business owners start, grow and expand their business.

Find a Small Business Development Center

SCORE

Volunteer business counselors, advisors, and mentors who offer individual free to low cost counseling throughout the U.S. and its territories.

Find a SCORE mentor

VBOC

Designed to provide entrepreneurial development services and referrals for eligible veterans owning or considering starting a small business.

Find a Veteran’s Business Outreach Center

WBC

WBCs provide free to low cost counseling and training and focus on women who want to start, grow and expand their small business.

Find a Women’s Business Center

Coronavirus Insurance

For insurance questions you’ll need to refer to your own coverage plan, but generally insurance companies have made it clear they aren’t on the hook to help. 

  • Income policies generally don’t protect your business from anything other than damage, and disease is not a “covered peril”. 
  • Policies do not cover “civil authorities” forcing your business to temporarily close. 
  • Business interruption insurance does not cover reduced customers due to mandated “shelter in place” orders.
  • Right now, the small business insurance marketplace doesn’t offer any policies explicitly covering coronavirus.

Yikes. Okay, insurance. Got it. We’re on our own to keep solvent. Let’s talk money.

Access to Capital 

7(a) program offers loan amounts up to $5,000,000 and is an all-inclusive loan program deployed by lending partners for eligible small businesses within the U.S. States and its territories. The uses of proceeds include: working capital; expansion/renovation; new construction; purchase of land or buildings; purchase of equipment, fixtures; lease-hold improvements; refinancing debt for compelling reasons; seasonal line of credit; inventory; or starting a business.

Express loan program provides loans up to $350,000 for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.

Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.

504 loan program is designed to foster economic development and job creation and/or retention. The eligible use of proceeds is limited to the acquisition or eligible refinance of fixed assets.

Microloan program involves making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan size of $14,000.

The SBA will help you find a lender that will comply with these small business funding programs.

The CARES Act is substantial, and banks are admitting that they’re unprepared to handle the large volume of applications. Right now, the funding programs listed above as part of the relief package can be submitted to any institution, but most have implemented a policy to process their current customers first. 

For a comprehensive list of links to program overview, borrower info and applications, rules and FAQs, visit the U.S. Treasury’s Assistance for Small Business Page.

If you’re hitting a brick wall with the financial institution, reach out to the free counselors and mentors available through the SBA to give you advice. They can also help you review your application to ensure that costly mistakes don’t prevent you from getting access to funding. 

You’ve got this, nav.igator. And we’ve got you. 

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