To help businesses that have been impacted or closed as a result of COVID-19, earlier this week Governor Pritzker announced an additional $85 million will be made available through two new grant programs designed to help alleviate the burden for businesses hit hardest by COVID-19. The new Business Interruption Grants Program (BIG) will make $60 million available for up to 3,500 businesses experiencing losses and/or unable to fully reopen until Phase 4 or 5. This program is earmarked specifically for restaurants which haven’t been permitted to allow outdoor dining, health and fitness centers, barbershops and salons, and other businesses located in disproportionately impacted areas (DIAs) of the state. Visit the Business Interruptions Grant (BIG) Program page for more information.
Key Dates: The start date for small businesses and sole proprietorships to submit PPP loan applications is April 3, 2020. The start date for independent contractors and self-employed individuals to submit PPP loan applications is April 10, 2020. Importantly, the Treasury Department guidance urges businesses to apply as soon as possible, due to a funding cap in place on this program.
Lender Information: PPP loans will be 100% federally guaranteed but handled by SBA-certified lenders. Lending institutions that are not currently SBA-certified but want to participate should email DelegatedAuthority@sba.gov.
Application Information: Interested parties should contact their local lender to see if they are SBA-certified and/or planning on participating in the program. Applicants will have to provide payroll documentation to the lender.
General Information: The SBA’s Economic Injury Disaster Loan (EIDL) program received significant funding in the FFCRA. These SBA loans provide small businesses with a long-term, low interest loan of up to $2 million to pay for expenses they would have met if not for the COVID-19 pandemic. These are loans, not grants, although refinancing an EIDL into a PPP Loan is a possibility, provided you used the fund for the proper purpose. Additionally, applicants can apply for both EIDL and PPP loans simultaneously, although the funds cannot be used for the same purpose.
Application Process: The SBA has just recently rolled out a new, streamlined application process that is available here. Note that if your business needs short term assistance, and you applied before this week, you may need to re-submit your application (see below).
If you have already applied for funds through EIDL and do not need the $10,000 advance, your application should continue to be processed without additional steps. You may check on the status of your application by calling 800-659-2955.
General Information: Businesses that need an infusion of capital in the short term and who have applied for a loan through the EIDL program can also apply for an Emergency Economic Injury Grant, which will provide an advance of $10,000 from the requested EIDL amount. This process can be started from the EIDL application, available here. Importantly, if you already submitted an EIDL application prior to the launch of this program, you will have to resubmit an application using the streamlined process.
The SBA will cover principal, interest and fee payments for six months for pre-existing loans and loans within six months of the effective date of the CARES Act for the following loans:
7(a) loans max out at $5 million are targeted towards borrowers who lack credit elsewhere and need access to flexible capital. These loans are offered through approved 7(a) (a list is available here)
504 Loans max out at $5.5 million and provide long-term fixed-rate financing and may be a good option for businesses looking to purchase property or large equipment
The SBA’s microloan program offers loans of up to $50,000 to help small businesses start up or expand.
General Information: The CARES Act includes a Employee Retention Tax Credit, designed to encourage employers to retain their employees during the COVID-19 crisis. The IRS describes the credit as a “fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This applies to wages paid between March 12, 2020 and January 1, 2021, with a maximum credit for any employee amounting to $5,000. Additional IRS guidance is available here. This credit is not available to employers receiving assistance via the Paycheck Protection Program.
General Information: According to the Guide, a provision in the CARES Act allows for the deferral of the employer portion of certain payroll taxes through the end of 2020. These deferred amounts are due in two installments – one at the end of 2021, the other at the end of 2022. Additional information will be provided at IRS coronavirus webpage. Deferral is not available to employers receiving assistance via the Paycheck Protection Program.
These organizations are well versed in how to help small businesses succeed and stand ready and willing to help your organization navigate these difficult times. Counseling resources include:
- Illinois Small Business Development Center at West Side Forward
- Contact is Curtis Roeschley, 773-473-4774 / firstname.lastname@example.org
- Women’s Business Development Center
- Minority Business Development Agency Business Center
- Illinois Department of Commerce & Economic Opportunity
Small Business Owner Guide to the CARES Act This guide has frequently asked questions for each of the programs established or enhanced to support small businesses, and I have briefly summarized the major provisions of each program below to make it easier to digest.
The Illinois Department of Employment Security (IDES) recently adopted emergency rules to try to make the unemployment insurance system as responsive to the current COVID-19 emergency as possible. Under emergency rules IDES recently adopted, an individual who is temporarily laid off due to COVID-19 does not have to register with the employment service and search for a new job if the individual is prepared to return to his or her job as soon the employer reopened. More information for workers laid-off due to COVID-19 can be found here.
Individuals receiving unemployment benefits beginning the week of March 29, 2020, will receive an additional $600 each week above what they would receive in regular unemployment benefits until the week ending on July 25, 2020. Additional unemployment benefits may now be available to some individuals whose unemployment is attributable to COVID-19. For more information clic here or call Claimant Services at (800) 244-5631