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Small Business Owner? Here’s Your Coronavirus Survival Guide.

~5 minute read
Tricia Dunlap, Esq. CIPP/US
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Every small business owner is struggling to navigate a very uncertain world right now.  We compiled and continually update this list of resources that can serve as the coronavirus survival guide for small businesses. We hope this is helpful:

1. The U.S. Small Business Administration Economic Injury Disaster Loan (EIDL) Program 

Funding for this program comes directly from the SBA for up to $2 million to either for- or non-profit enterprises.  The interest rate is 3.75% (for-profit) or 2.75% (non-profits) for a term up to 30 Small Business Administration Logoyears. You can get up to $25,000 with no collateral.  Above $25,000, collateral will be necessary but the standards for what qualifies as collateral are low. Funds may be used to meet payroll, pay fixed debt payments, accounts payable, and other expenses.  You may apply online here.  For information, use the link above or call the SBA at 800-659-2955.  Here’s a great 14-minute webinar on the program from the Virginia Department of Small Business and Supplier Diversity.  Online applications will be processed more quickly than mailed applications and the online process walks you through all the forms listed below:

  • Loan application (SBA Form 5), completed and e-signed.  Ideally, do this online.
  • A Tax Information Authorization (IRS Form 4506-T) completed and signed by each applicant.  “Applicants” include:
    • Each principal owning 20 percent or more of the applicant business;
    • Each general partner or managing member; and
    • Any owner who has more than 50% ownership in an affiliate business (a subsidiary, parent, or other business with common ownership or management)
  • Most recently filed federal tax returns
  • A Personal Financial Statement (SBA Form 413), completed, signed, and dated by the applicant
  • A Schedule of Liabilities listing all fixed debts (SBA Form 2202)

2.  The U.S. Small Business Administration Paycheck Protection Program Loan

The CARES Act created this loan program for small businesses, nonprofits, sole proprietors, independent contractors, and self-employed individuals.  So long as your business has fewer than 500 employees and was operating as of February 15, 2020, it will qualify for a loan.  There are no fees and the SBA will not require a personal guarantee or collateral.  Maximum loan amount is 2.5 times your average monthly payroll costs over the past 12 months plus (if you have one) any balance due from an existing SBA loan (cap:  $10 million).  You can use the loan for payroll costs, mortgage interest, rent, and utilities.  Loan funds spent on those costs in the first eight week after disbursement will be forgiven, subject to any reduction in staff or salaries/ wages you might have done.  This is a complex but extremely helpful loan program — apply through an approved SBA lender such as Virginia Community Capital or SonaBank.  Be sure to read our guide to the PPP here and our video here.

3. For Virginia-based, SWaM Businesses 

Through the SWaM Business Loan Fund, Virginia’s Department of Small Business and Supplier Diversity offers a “microloan” of up to $25,000 at prime + 2% for 48 months.  This is a direct loan without bank involvement. The funds can be used for working capital or as a loan guarantee.  The application fee is $100. No down-payment is required but you need to have equity in your business and a minimum credit score of 650.  Approval takes 5 – 10 business days. 

4. Virginia, Child Care Financing Program

For Virginia-based childcare companies, the SBSD offers a direct loan (no bank involvement) to help fund a childcare center or home provider.  It’s through the Va. Small Business Financing Authority.  There are restrictions on how the funds can be used.

5. Microgrants to DC-based Businesses

  • The DC Small Business Recovery Microgrant Program will be housed in the Office of the Deputy Mayor for Planning and Economic Development. 
  • D.C. launched a $25 million microgrant program to provide relief to local small businesses affected by the coronavirus (COVID-19). As part of the District’s recovery efforts, relief will be provided to workers and small businesses through waivers for unemployment claims, federal assistance, local funding, and local programs.
  • The microgrants will be available to businesses, non-profits, and independent contractors or self-employed individuals. 
  • Grants will provide financial support for expenses such as employee wages and benefits, rent, and other operating costs. The program will provide support up to $25,000.
  • For more information, go here.

Truist logo

6. Truist committed $2M to small businesses

To qualify for this grant, the business must be a 501 (c)3,employ fewer than 10 full-time employees, and have an annual gross revenue under $1M.

Verizon logo

7. Verizon is providing $2.5M in grants to small businesses

Verizon is providing $2.5M in grants to small businesses facing immediate financial pressure due to coronavirus (COVID-19). This grant is part of their Pay it Forward Live weekly streaming events which will generate more funds for these grants.

Facebook logo

8. Facebook provides grants

Facebook is also providing grants for small businesses. More details are available on the Facebook website.

9. Take surveys

The Community Foundation created a survey to help non-profits in the Greater Richmond area to share new or increased needs as a result of the coronavirus (COVID-19). Similarly, the Virginia Department of Small Business & Supplier Diversity are also asking all small business owners to complete a survey on the impacts of coronavirus (COVID-19) on their small business.

 

Have something to add to our Coronavirus Survival Guide for Small Businesses? Leave us a comment and we’ll be sure to update our list of resources.

We also have a .pdf version of the Coronavirus Survival Guide for Small Businesses available here.

 

This material is provided for informational purposes only.  It is not intended as legal advice and does not create an attorney-client relationship between Dunlap Law and anyone who reads it.  You should consult with an attorney before taking action on the issues outlined here. In some jurisdictions, this material is considered attorney advertising.  Prior results have no bearing on future outcomes.





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