Private organizations and federal agencies are scrambling to provide economic relief to small businesses affected by the new coronavirus, COVID-19.
Small businesses across the nation are taking a beating due to federal guidelines on social distancing and local lockdown procedures to curb the spread of the virus.
“This is an unprecedented situation, where – for good reason – the government has instructed major parts of the economy to close down so that we can win this fight against this virus,” Treasury Secretary Steve Mnuchin said in an interview with Fox Business.
While such measures are intended to help the country in the long term, many businesses are feeling the pain now, especially in the restaurant and hospitality industries.
Here’s how small businesses affected by the coronavirus can get assistance.
Banking and Credit-Card Programs
On March 9, the FDIC urged financial institutions to assist its customers who are dealing with the effects of the coronavirus. A slew of major banks and credit-card issuers announced steps they will take to support their customers.
Many banks said they will help on a case-by-case basis and to call the service number on the back of the issued credit or debit card.
Chase, CitiBank and SunTrust were more specific, announcing several means of assistance such as waiving early withdrawal and monthly service fees, providing loan payment relief or helping businesses create contingency plans.
Codetic compiled a list of banks that announced coronavirus-related assistance.
Emergency Government Assistance
Three major initiatives aim to provide economic relief to individuals and businesses.
Families First Coronavirus Response Act
On March 18, President Donald Trump signed into law the Families First Coronavirus Response Act. Though aimed broadly at household assistance, the new law changes much for employers with less than 500 employees. The act provides tax credits for businesses to expand family medical leave and to grant their workers at least 14 days of paid sick leave amid the outbreak.
Businesses with 50 employers or fewer may qualify for a waiver if they can prove these requirements will cause additional “financial hardship.”
“This [law] will provide significant relief to small businesses that cannot afford the employee costs associated with coronavirus. [It] provides a dollar for dollar reimbursement for coronavirus related sick leave costs,” Treasury Secretary Mnuchin announced.
For cash-strapped businesses, the U.S. Treasury will allow them to use IRS deposited funds to cover the costs of paid leave and, in some cases, administer cash advances, Mnuchin said.
Deferred Tax Payments, Extended Filing Deadline
Through executive action, President Trump deferred federal tax payments until July 15, 2020 – up to $1 million for non-corporate filers (including the self-employed) and up to $10 million for corporate taxpayers.
“This deferment allows those who owe a payment to the IRS to defer the payment until July 15 without interest or penalties,” Mnuchin said.
According to the U.S. Treasury, the deferment will free up an estimated $300 billion.
On Friday, March 20, Mnuchin announced the filing deadline is also extended to July 15.
$1,200 Stimulus Checks Through the CARES Act
President Trump signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law March 27. The sprawling $2 trillion package includes direct assistance to most Americans via a one-time $1,200 check, plus more money for parents with kids under 17. The funds will come automatically, and the extra cash is expected to spur economic activity.
See our Q&A for everything we know about the stimulus checks.
An additional $360 billion is earmarked for small businesses to encourage them to keep employees on the payroll and to beef up the SBA’s disaster relief loan programs.
Facebook Small Business Grants
Facebook pumped $100 million into a newly unveiled fund for small businesses that are reeling from COVID-19. Small businesses from more than 30 different countries will be eligible to apply for grants or ad credits through the initiative, dubbed Facebook Small Business Grants Program.
The funds may be used for:
- Workforce investments.
- Operational expenses.
The social media giant has not yet released details on how to qualify or apply but will share updates “in the coming weeks.”
In the meantime, business owners can utilize Facebook’s new Business Resource Hub, which offers tips and tools to keep workers and customers up-to-date during the outbreak.
SBA Disaster Loans
The first law in response to COVID-19, the Coronavirus Preparedness and Response Supplemental Appropriations Act, supplied $20 million to the Small Business Administration so the agency can administer low-interest SBA disaster loans to small businesses impacted by the coronavirus. The CARES Act padded that sum with an extra $10 billion.
Loans up to $2 million are now available to small businesses and nonprofits in all 50 states and Wasington, D.C.
“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact,” the terms state.
The interest rates for disaster loans are 3.75% for businesses and 2.75% for nonprofits.
The CARES Act also provides disaster loan advances up to $10,000 for small businesses experiencing a temporary loss of revenue due to the coronavirus. Funds are available in as little as three days of a successful application.
SBA loans and advances may be forgiven if the funds are used for costs related to payroll, health care, rent and utilities.
Qualifying organizations should apply online or reach out to the SBA for assistance at 1‐800‐659‐2955.
Other Local Resources
Small business funding is often coordinated at a local level, and community resources shouldn’t be overlooked.
- Governors’ offices: Governors coordinate with the SBA to designate disaster areas. Their websites typically include updates and other resources for business owners. The National Governors Association has compiled a comprehensive list of contact information for every governor’s office in the nation.
- Score: A nonprofit partner of the SBA, Score offers small business owners a plethora of free, local resources, including webinars, workshops and mentors. During the coronavirus outbreak, all mentoring sessions will be conducted over the phone or online.
- Small Business Development Centers: With more than 1,000 centers in the U.S., the SBDC provides business owners with assistance at a local level and is an extension of the SBA. Centers help entrepreneurs and small businesses with a variety of resources and will likely coordinate the SBA disaster loan program locally.
- U.S. Chambers of Commerce: The U.S. Chamber represents more than 3 million businesses and is the largest lobbying organization in the country. Throughout the coronavirus outbreak, the Chamber has kept updates on how it’s affecting small businesses and, on several occasions, called on the government to enact specific policies to aid business owners.
Adam Hardy is a staff writer at Codetic. He covers the gig economy, entrepreneurship and unique ways to make money. Read his latest articles here, or say hi on Twitter @hardyjournalism.