COVID-19 Relief Updates: 3 Key Programs
The Pace SBDC is keeping track of COVID-19 small business financing programs, both program updates and new resources. See below for three financing options your business may want to consider.
The Paycheck Protection Program (PPP) has relaunched with “first draw” applications now being accepted until March 31st, 2021 for businesses that have not received a PPP loan before August 8, 2020. PPP loans are issued through participating lenders, and are calculated as up to eight weeks of average monthly payroll (based on 2019 figures) including benefits, plus an additional 40% of that amount for a range of operating expenses, up to a maximum of $10 million. Further, PPP loans are completely forgiven if the money is used for eligible expenses and other conditions are met.
Additionally, Second Draw PPP Loans are now available for certain eligible borrowers that previously received a First Draw PPP Loan and will or have used the full amount only for authorized uses; have no more than 300 employees; and can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million.
For more information on these programs and relevant application links check out the Pace SBDC’s PPP updates blogpost.
The Economic Injury Disaster Loan (EIDL) application deadline was extended until December 31, 2021. Through EIDL, the US Small Business Administration (SBA) offers up to six months in working capital at an interest rate of 3.75% for small businesses and 2.75% for non-profits, and a maximum term of 30 years. Additionally, the first payment is deferred for one year. Also, as part of the overall program, advance grant distributions of $10,000 will soon become available to eligible small businesses and nonprofits in low-income communities that did not previously secure these allocations, or the difference between what an entity received under the CARES Act and $10,000 if they received some prior EIDL advance funding. This advance program is not yet live.
Check out the Pace SBDC's EIDL update blogpost for more info.
New York Forward Loan Fund (NYFLF) provides working capital loans of up to $100,000 at 3% for small businesses and small landlords and 2% for nonprofits through select participating community lenders. Businesses now qualify for the NYFLF program if they have:
50 or fewer full-time employees (previously 20)
Gross revenues of less than $5 million per year (previously $3 million)
Received a PPP loan of up to $500,000 or an EIDL loan of up to $150,000
Look at the Pace SBDC's NYFLF update blogpost for more info.