The materials and links in this website, including, without limitation, in the state map, have been compiled from various public sources by Goldstein and McClintock LLLP (“G&M”) and its agents, and are merely intended to provide readers with a starting point for researching lending and grant programs that are or may be or become available to assist their businesses during the COVID-19 crisis. G&M therefore cannot vouch for or verify the accuracy of the information, and takes no responsibility for information posted on third party websites that this site links to. This information is given in summary form and does not purport to be complete. Some of the referenced programs have not been fully implemented and may never be, and all of them may change and evolve. G&M will not be regularly updating all links or summaries to reflect such changes, so information may be outdated. For all of the foregoing reasons, and generally, information provided on this website is not, and should not be considered to be, legal advice. Moreover, G&M is not suggesting that borrowers will be eligible for particular programs, or suggesting that particular programs might be beneficial. None of the links and information take into account your business’ particular financial situation and qualification for any federal or state loans during the COVID-19 crisis. Before acting on any information provided, you should consider the appropriateness of the information, check for updates, obtain independent financial advice, and seek legal advice from G&M where appropriate.
Coronavirus (COVID-19) Resource Page
One of G&M’s central practices is helping businesses remain operational through crisis, preserving jobs, and maximizing economic outcomes. That practice has never had more community importance than now in light of the COVID-19 pandemic. We take that responsibility seriously. Although working remotely to safeguard the health of our team, clients, and communities, we continue to provide highly responsive and critical services to our clients. Moreover, in an effort to provide support to businesses owners generally, we provide the following resources. If this information helps save even one business – and the jobs that go with it – our efforts will have been rewarded.Legal Disclaimer
Federal Emergency Loan & Grant Programs - COVID-19
The $2 trillion Coronavirus stimulus package, referred to as the CARES Act, was signed into law on March 27, 2019. This new law includes $367 billion to help small business owners weather the COVID-19 related economic crisis and builds on resources previously in place. The two primary loans now available to business owners are commonly referred to as “Payroll Protection Program Loans” and “EIDL Loans.” There are also smaller bridge loans available in connection with each. Use the links below to learn more about these programs.
The SBA expects that both the Payroll Protection Program Loans and EIDL loans will be given to small business applicants approximately one month after applying. If a small business has applied for this loan but needs funding right away, there are two options a small business may utilize.
- Bridge Loans: The SBA Express Bridge Loan (“EBL”) is available to help businesses while they await approval or funding for either the Payroll Protection Program Loan or the EIDL Loan. These loans are available to businesses that had a prior borrowing relationship with an SBA qualified lender. Under the SBA EBL program, businesses can borrow up to $25,000 under a seven-year repayment term, with interest rates capped at the prime rate + 6.5%.
- EIDL Advance: The CARES Act provides that those applying for the EIDL Loan may receive a $10,000 grant in the form of a loan advance. The EIDL advance can provide modest economic relief to businesses that are currently experiencing a temporary loss of revenue and provides a bridge as the EIDL application is pending. The SBA provides that this advance will not have to be repaid, even if the EIDL application is later denied, and expects it to be available within three days after the application is submitted.
If you would like more information as to how to qualify for these loans or to talk to one of our attorneys to discuss how you may be able to manage your business through these trying times, please contact one of your trusted G&M attorneys.
Under the Paycheck Protection Program, pre-approved SBA 7(a) lenders will provide loans to small business with fewer than 500 employees. The usual SBA 7(a) program limitations on small business eligibility, such as based on annual revenue or affiliations, do not apply (making it easier to qualify). The loans are available to assist small businesses with payroll support, mortgage interest, rent, and utility payments. Best of all, these loans are unsecured and require no personal guarantee. A few highlights of the program include:
- Most small businesses with fewer than 500 employees are eligible, including those with more than one physical location so long as total combined employees is below 500 employees.
- Sole-proprietors, independent contractors, and other self-employed individuals are also eligible for these loans.
- Normal affiliation rules for businesses in the hospitality and restaurant industries and franchises are waived.
- Businesses must have been operational as of February 15, 2020 and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor.
- Loan amounts up to $10 million can be used for (i) payroll support which includes average eligible monthly payroll costs (excluding comp above $100,000), paid sick or medical leave and insurance premiums, multiplied by 2.5, (ii) mortgage interest payments or rent and (iii) utilities payments.
- Borrowers will be required to make a good faith certification that the 7(a) loan is necessary due to uncertain economic conditions caused by COVID-19 and will be used to retain workers and maintain normal operations (payroll, lease and utility payments).
- 2-year loans will be given at an interest rate of 1.00% with no prepayment penalty. Repayment of the loans (if not forgiven as described below) is automatically deferred for six months, however interest will accrue during that six month period.
- Borrower is eligible for loan forgiveness equal to the amount spent by the Borrower during an 8- week period after origination date of the loan on operational costs compared to the prior year incurred prior to February 15, 2020. Amounts forgiven may not exceed the principal amount of the loan.
- 7(a) lenders will verify these payments through documentation such as (i) IRS Payroll Expense Forms 940 and 941, (ii) a payroll summary report of wages and benefits supported by a bank statement or employee pay stubs, (iii) mortgage or lease and utility statements and (iv) trailing twelve–month profit and loss statement as of the date of application.
- Debt forgiveness will be reduced proportionately by any reduction in average monthly number of full-time employees during the 8 week period compared to the average monthly number of full-time employees between either February 15, 2019 and June 30, 2019 or between January 1, 2020 and February 29, 2020 (at the election of the borrower) or pay received by any employee reduced beyond 25 percent of such employee’s compensation in the last full quarter prior to the 8 week period in which the employee was employed. Borrowers may re-hire those workers who were previously laid off due to COVID-19 crisis and such workers will qualify under the guidelines.
- Cancelled indebtedness will not be included in the Borrower’s taxable income.
- UPDATE: self-employed individuals and independent contractors are eligible as of April 10, 2020 to apply for the Paycheck Protection Program. The loans are available to cover up to eight weeks of average monthly payroll plus 25%, at a maximum amount of $10 million with a fixed 1% interest rate and maturity of two years, with loan payments deferred for six months. The program will be available through June 30.
- UPDATE (as of April 16th, 2020):
- Paycheck Protection Program (PPP) reaches maximum $350 billion appropriated by CARES Act.
- SBA currently has no authority to accept PPP loans.
- SBA currently has no authority to accept PPP lender applications.
- E-tran currently is shutdown.
- Lenders currently are not able to adjust loan amounts within CAFS system.
UPDATE: The SBA has issued guidance that it will now provide EIDL loan disbursement of up to only $15,000, in addition to the advance of up to $10,000 in emergency grant funds to eligible applicants within three days of application. There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount.
In addition to expanding the 7(a) loan program described above, the CARES Act alternatively provides that small business may recoup revenue losses attributed to the COVID-19 pandemic via the 7(b)(2) Economic Injury Disaster Loan (“EIDLs”). Rather than the Paycheck Protection Loan Program that is essentially based on preserving employment and operation of small business over a longer period of time, EIDL 7(b) Loans are working capital loans that can provide support for 7(a) small businesses experiencing a temporary loss of revenue. The EIDL program allows applicants to borrow up to $2 million with long-term repayments (up to 30 years) in order to keep payments affordable, with the first month’s payments being deferred a full year from the date of the promissory note. To qualify for EIDL Loans, the small business must meet the qualifications for an SBA 7(a) loan so the restrictions for such loans are not only companies with under 500 employees, but is also based on a company (and its affiliates) annual revenue. Thus, many larger small businesses will not qualify for the EIDL program and will be better suited for the Paycheck Protection 7(a) loan program described above. Also, a small business may take advantage of only one loan program either through an EIDL Loan or Paycheck Protection loan. You will want to speak with a G&M attorney to determine which one your small business may be better suited for to provide relief during the COVID-19 crisis.
The small business must have been qualified or can qualify under previous SBA 7(a) guidelines. The applicable interest rate for EIDL Loans is 3.75% for for-profit businesses and 2.75% for nonprofit entities. The other loan terms are determined on a case-by-case basis and are primarily based upon each Borrower’s ability to repay. The SBA has the discretion to offer these loans based solely on an applicant’s credit score, or it may use an alternative method for determining applicant’s ability to repay.
State Emergency Loan & Grant Programs - COVID-19
The list below contains information on specific state and municipal loan and grant programs that may be available to businesses impacted by the COVID-19 pandemic.
If considering financing to assist with pandemic-related financial issues, please consider the following article on high level options for addressing financial distress. If you have questions about the issues raised in the article, please contact one of G&M’s attorneys.
Additional Resources for Businesses – COVID-19
The list below contains information on additional resources (many non-governmental) that may be available to assist businesses impacted by the COVID-19 pandemic.
Through Kabbage Payments, any business can sign up to sell gift certificates online, and anyone can purchase them to support participating small businesses.More Information
Grants of up to $10,000 from an investment of $2.5 million from Verizon to support struggling businesses, especially entrepreneurs of color, women-owned businesses and other enterprises that don't have access to flexible, affordable capital in historically underserved communities may be offered.More Information
Offering $25 million in relief, primarily focused on supporting independent local restaurant and nightlife businesses, in the form of waived advertising fees, and free advertising, products and services, during this period.More Information