Small business aid and relief resources during COVID-19

The coronavirus is affecting every facet of society. With stay-at-home orders for nonessential businesses in many parts of the U.S., and workers out sick or in quarantine, small businesses are in a period of uncertainty. This crisis has hit small businesses particularly hard, but the good news is, help is available.

U.S. lawmakers passed a $2 trillion stimulus package, the Coronavirus Aid, Relief and Economic Securities Act (CARES). This bill, along with two previous bills and other measures by states, financial institutions, and even corporations, offers much needed financial assistance to the nation's more than 30 million small businesses.

Emergency funds for small businesses

There are many reasons why small businesses need capital right now. Perhaps revenue has slowed or stopped due to the virus. Or businesses might need to fund additional training and staffing for virus-related expenses, such as disinfecting their facilities or making home deliveries.

In addition, the Families First Coronavirus Response Act, which President Trump signed into law on March 18, 2020, mandates that employers with fewer than 500 employees provide sick leave or family leave to their employees who need to stay out of work because of the virus. This puts an additional strain on small businesses and further necessitates their need for funding, although payroll tax credits are designed to mitigate those expenses, as you'll see below.

While not comprehensive, here is a list of resources for small businesses seeking an infusion of cash for short-term help:

1. Loans backed by the SBA

The CARES Act includes $349 billion for the Small Business Administration, or SBA. The SBA will temporarily lend this money to small businesses (generally defined as those with 500 or fewer employees) through its 7(a) Loan Guarantee program. Employers can access these loans through banks and credit unions. The loans will be as high as $10 million, with interest rates up to 4%. These loans may be forgiven if an eligible borrower maintains its payroll through June 30, 2020, which is why this is called the Paycheck Protection Program.

2. Disaster relief loans

The SBA will also provide low-interest loans of up to $2 million through its Economic Injury Disaster Relief program, with interest rates at 3.75%. Small business owners in all states and territories are eligible to apply. To learn more, go to SBA.gov/disaster.

3. Loans from banks

Certain banks and credit unions are offering reduced rates, waived fees, or due date extensions on loans. View the programs that Fulton Bank is offering for people impacted by COVID-19.

4. Unemployment benefits

Through the Pandemic Unemployment Assistance program, the CARES Act vastly increases eligibility for unemployment. Self-employed workers, who are typically ineligible for unemployment benefits, now have access to these funds if their income has been reduced by the outbreak. The federal government is also increasing the amount of aid available by $600/week until the end of July 2020.

These benefits might also be available for workers whose hours have been cut or who need to stay home due to illness or to care for a sick family member. This potentially lessens the need for small business owners to continue to pay their workers during this time.

Check the Department of Labor website for current information on unemployment and paid sick leave. Or find unemployment benefits and apply in your state.

5. Insurance payments

If you have business interruption insurance, now is a good time to contact your insurer. This type of insurance, which is an add-on to your comprehensive or property/casualty policy, provides payouts in the event a disaster negatively impacts your business. Even if you don't think your policy covers damage caused by a virus or disease outbreak, it's worth contacting your carrier to talk about your situation and potentially file a claim.

6. State and local help

States are also providing relief in a variety of forms. To see what's available in your state; view the list of governors' websites.

The SBA has 68 district offices and partner organizations across the country. They can help you access resources and make a plan for tackling this challenge. Find a local office near you.

Some municipalities also have virus-related assistance programs. To find out if your city or town is one of them, check with your state or local Chamber of Commerce.

7. Corporate programs

Larger companies are offering help as well. For example, Facebook is setting aside $100 million in grants and ad credits to small businesses to help with coronavirus disruptions. Sign up for updates.

Assistance with expenses for small businesses

In addition to money to bridge the gap until this storm has passed, small businesses need help paying ongoing or upcoming bills. On a regular basis, they might need to cover loan payments, rent or mortgage, taxes, insurance premiums, digital subscriptions, and association fees, among others.

Here are a few options small business owners could consider:

1. Extensions on federal taxes

The IRS has extended the deadline for filing tax returns and paying taxes until July 15, 2020. Estimated tax payments are also now due on July 15 instead of April 15. Check the IRS Coronavirus website for more information.

2. Payroll tax credits

Small businesses are required by law to provide sick and family leave for employees affected by the pandemic, but the federal government is helping to defray those costs. Two new payroll tax credits will immediately and fully reimburse small business owners for the cost of providing virus-related leave to employees. View the IRS Coronavirus website for details on how to get these tax credits. 

3. Loan forgiveness through the SBA

The SBA has announced that if you are paying back a home or business SBA disaster loan, those payments are automatically deferred through December 31, 2020. You do not need to contact the SBA to request a deferment.

4. Loan forgiveness through your lender

If you have loan payments due, contact your lender. The Federal Deposit Insurance Corporation is suggesting that banks should serve their customers by deferring or skipping upcoming payments, extending payment deadlines, or waiving late penalties and fees.

5. Rent or mortgage relief

If you pay rent for your office or facility, talk with your landlord. Many landlords are granting moratoriums for 30–90 days or longer. If you have a mortgage for your business, you might be able to take advantage of mortgage help from Fannie Mae and Freddie Mac. If your mortgage is backed by either of these federal programs, you may be eligible to delay monthly mortgage payments temporarily. Visit the Federal Housing Finance Agency's website for details.

For all other expenditures, communicate. If you owe a vendor for services or supplies, talk to them about reducing your payments or extending the deadline. If you have a regular delivery from a supplier, discuss the possibility of suspending your contract for a few months. No one knows exactly how long this crisis will continue, but everyone is aware of the problem. While you protect you and your workers' physical health, pursue the resources listed here to safeguard your business's health as well.

Stay informed

For up-to-date information on federal legislation for coronavirus relief as well as other resources for small businesses, visit the U.S. Chamber of Commerce's Coronavirus Small Business Guide website.