UPDATE: As of May 5, 2021, the Paycheck Protection Program (PPP) has run out of money, according to the Small Business Administration (SBA). SBA is now only processing outstanding applications. Community Financial Institutions serving minority borrowers are still accepting PPP applications. A total of $8 billion was set aside for those businesses.
Webinar on Wed., May 12: COVID-19 Relief: Understanding the Restaurant Revitalization Fund
It’s not too late to find help. Small businesses needing financial assistance as a result of the pandemic can still connect with economic relief programs offered on both the federal and state levels. It’s just a matter of determining the option that fits best.
As you decide, keep a few considerations in mind. For example, if the option is a loan, is it forgivable? And what about applying for more than one type of funding? Is that allowed?
We broke down each of the relief options currently available through the SBA to help you make a smart choice for your business.
Payroll Protection Program
PPP Loan 1 is still available for companies who haven’t already received this funding. You have to hurry, though. The deadline for applications is May 31. The types of businesses that qualify include:
- Sole proprietors, independent contractors, and self-employed persons.
- 501(c)(3) non-profit organizations, 501(c)(19) veterans’ organizations, or tribal business section 31(b)(2)(C).
- Businesses with less than 500 employees (with some exceptions).
If funding is used according to the guidelines, the loan can be forgiven.
PPP Loan 2 rolled out as the pandemic rolled on. This second round of PPP funding includes businesses with less than 300 employees, 501(c)(6) and destination marketing organizations with less than 300 employees and businesses that received PPP Loan 1 and will use the total amount for authorized expenses before receiving PPP Loan 2.
The deadline to apply for PPP Loan 2 is May 31.
Economic Injury Disaster Loan (EIDL)
The EIDL loan is another resource established to cover expenses incurred due to a disaster. It is meant to be repaid. The loan terms are fixed rates of 3.75% for businesses and 2.75% for non-profits for up to 30 years. Companies who applied for EIDL were given an advance of up to $10,000, which is forgivable. The COVID-19 EIDL loan expires on Dec. 31.
SBA added the Targeted EIDL Advance and Supplemental Target Advance to assist businesses in low-income locations. The Targeted EIDL advance was for qualified companies who didn’t receive the initial total amount of $10,000; an advance was made, so the total equaled $10,000. The Supplemental Target Advance is an additional $5,000, so qualified applicants can receive up to $15,000.
Qualifications for the newly-released Supplemental Target Advance are business:
- Located in a low-income community as defined by the IRS code.
- Employing fewer than 10 employees.
- Proving more than 50% economic loss during eight weeks beginning on March 2, 2020, or later compared to the same time period in 2019.
Applicants for either Targeted EIDL advance don’t apply as SBA is reaching out to qualified businesses.
Shuttered Venue Operators Grant (SVOG)
The SVOG was established to provide aid to live event companies forced to shut down during the pandemic. Because it is a grant, SVOG recipients won’t need to repay the funding provided. However, the applicant will need to prove their eligibility. All applicants are required to register with the System for Award Management (SAM). Use the SVOG checklist when applying so you make sure all the necessary documentation is included.
Companies that qualify for the grant and have been operating since Feb. 29, 2020 include:
- Live venue operators or promotors
- Theatrical producers
- Live performing arts organization operators
- Museum operators
- Motion picture theater operators
- Talent representatives
The full list of expenses the grant funds is available here.
Restaurant Revitalization Fund (RRF)
One of the pandemic’s hardest-hit industries is the restaurant sector. The Restaurant Revitalization Fund provides assistance for restaurants, bars, and other qualifying businesses. If the company uses the funds for eligible expenses by March 11, 2023, the money will not have to be repaid. Registration begins on April 30, 2021, and applications open on May 3, 2021. To apply, you must submit SBA form 3172 and include tax returns, bank statements, financial statements, point-of-sale reports, and IRS Form 1099-K.
Priority is given to self-certified small businesses owned by women, veterans, social or economically disadvantaged individuals. The full list of businesses that qualify is available here.
With so many options, you may have a difficult time knowing which loan applies to your situation. Some businesses may even be eligible for more than one loan. This SBA chart offers some quick answers to questions about funding types available.
For more information from the SBA, find an office near you. When deciding and applying for any SBA funding, consult with a credible professional and start your search at bbb.org.
Did your business receive funding to help with the pandemic? Share what worked or what didn’t in our comments section.