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