COVID Small Business Relief: Loans and Grants
Depending on the size of your small business, you may be qualified for certain loans and grants on both the federal and state level.
What is considered a small business?
Small businesses are defined based on what type of industry they belong to. To determine if your business is considered to be a small business by the Small Business Administration, visit the SBA Size Standards webpage.
COVID Federal Small Business Help
The Small Business Administration (SBA) is providing disaster loan assistance in all states. These low-interest loans are targeted toward small businesses and nonprofits that have experienced severe economic injury due to the coronavirus. Read more about the SBA’s Coronavirus Relief Options to see if your small business qualifies.
As part of the Coronavirus Aid Package (CARES Act), small businesses can also apply for forgivable loans under the Paycheck Protection Program (PPP) that can be used to pay employees and fund other day-to-day business operations. To learn more, visit our guide to the CARES Act.
The Paycheck Protection Program
One of the most important features of the federal stimulus package is the Paycheck Protection Program (PPP), designed specifically to help small businesses stay in business and keep their employees on payroll. As of April 22, 2020, the federal government as allocated additional funding to the PPP. However, these funds will likely be claimed by the many businesses that have been impacted by the coronavirus. If you haven't already, talk to your local bank or small business lender about applying for the Paycheck Protection Program and to find out the most up-to-date information.
To learn more about the PPP and how your business can apply for a PPP loan if additional funding is allocated, read our Guide to the Paycheck Protection Program for Small Businesses.
COVID State Small Business Help
State small business loans will vary by state. For more information on state-specific small business loans, select your state from the dropdown menu at the top of the page.
COVID Small Business Relief: Private Sources
Some private companies and organizations have established grants for small business relief. Facebook is one such company. Certain credit card companies and banks, like Bank of America, are also offering economic relief for their small business members.
For a larger list, visit our guide to private grants for small business relief.
The federal government has extended the payment deadline for all first-quarter tax payments from April 15th, 2020 to July 15th, 2020. Small businesses must file IRS Form 7004 to extend their tax payments, while individuals must file IRS Form 4868.
State Tax Relief
State tax relief varies by state. For more information on tax relief in your state, select your state from the dropdown menu at the top of the page.
Changes to Federal Paid Leave
As of March 18th, 2020, the federal government is providing certain workers paid sick leave in the event that they are ill, quarantined, or seeking medical care.
This relief act applies to employees at small, midsize, and nonprofit companies so long as the employee has been employed for more than 30 days.
The Department of Labor also recommends that small business employers check if their employee’s sick leave is covered under the Family and Medical Leave Act (FMLA). If an employee or their family is incapacitated due to the coronavirus (or any pandemic illness), their employer is required to provide job-protected, unpaid leave.
So long as employers are covered, they are required to abide by federal FMLA and state FMLA laws. For more information on the FMLA, check out the Department of Labor’s website.
In the event that your small business undergoes financial difficulties during the coronavirus spread, consider implementing these guidelines for the good of your business and its employees:
- Consider putting employees on temporary leave instead of terminating them
- Communicate with customers regarding business closures, reduction of hours, or maintenance changes
- Diversify your suppliers or stock inventory with an adequate amount of supplies to last an extended period of time
- Contact your insurance agent to review any business interruption policies that your business may have in place
- Prepare a plan with your employees regarding present and future business actions regarding the virus
- Review your emergency business continuity plan. If you don’t have one, take a look at New York’s Emergency
For more business solutions, visit the SBA website.
The Coronavirus Aid Package (CARES Act) is providing extended unemployment benefits to workers who are ineligible for regular unemployment programs but are out of work solely because of the coronavirus pandemic. Unemployment compensation has also been extended by 13 weeks.
State-specific unemployment insurance actions related to the coronavirus pandemic vary. For more information on unemployment insurance actions in your state, select your state from the dropdown menu.
NOTE: Workers cannot file for unemployment if they are receiving any kind of direct financial help from your business.
Small business employers should also establish strategies with their employees and customers to avoid spreading the virus:
- Encourage sick employees and customers to stay home
- Separate sick employees from the rest of the employees and encourage them to go home
- Practice good self-hygiene
- Avoid travel
- Clean all work environments routinely and thoroughly
NOTE: Some states have issued a “stay-at-home” or “shelter-in-place” executive order shutting down non-essential businesses. To see if your business is considered essential in your state, select your state from the dropdown menu or visit our guide to essential businesses.
The best way to prevent the spread of the virus in your business is to create a “work from home” policy. If your business is able to provide remote work opportunities for its employees, consider the following strategies:
- Invest in new technologies and softwares
- Provide remote training for employees
- Establish a remote communication system
- Enforce a daily routine
- Trust in your employees’ ability to stay on track
Frequently Asked Questions
Where can I find an SBA Approved Lender?
The SBA has created an interactive map where you can find SBA-approved lenders near you. Just follow the link and enter in your zip code to find banks and other organizations that can help you apply for an SBA loan.
Can a small business apply for unemployment benefits?
If you are the owner of an LLC or S-Corp and receive a monthly salary like other employees, you may be eligible to receive unemployment. Most states require that you have already been paying unemployment tax for yourself. Also you will need to meet your state’s requirements for receiving unemployment, such as being able to work and actively seeking employment.
What is an essential business?
Each state defines “essential business” in its own way, but the common theme is a business that serves the basic needs of the population. For instance, grocery stores, banks, gas stations, auto repair shops, and health care services are universally considered essential businesses.
For more information, read our article “What is an Essential Business?”