March 30, 2020
Many of my friends, clients and colleagues are left in some confusion not really knowing how their once thriving business will survive this shift in our economy. Its been at least a decade since we have seen small businesses suffer a great deal. In the last economic downturn, I didn’t only see businesses close their doors, but I also saw business’s pivot, and acclimate to the conditions at the time. It wasn’t all bad news back in 2008. Many new businesses were born out of that time, and few were able to weather the storm. We are just beginning to feel the ripples of what the COVID-19 pandemic is causing. I have seen some of our favorite restaurants here in Grand Rapids close their doors.
Wherever you may find yourself, pivoting to thrive, or trying to survive, I have compiled a list of financial relief resources for you to consider as a business owner. This is continuing to unfold, so this is accurate as of today. Please check back as information is constantly being updated as we continue to move through this ever changing time.
CARES ACT AND THE PAYCHECK PROTECTION PROGRAM
On March 27th, 2020 the CARES (Coronavirus Aid, Relief and Economic Security) Act was passed.
CARES Act provides an unprecedented level of emergency assistance for individuals, families and businesses affected by the coronavirus pandemic.
It includes a new loan program which is administered by the SBA . This new loan program is called the Paycheck Protection Program. It is intended to provide small businesses with eight weeks of cash-flow support. These loans are 100% federally guaranteed. Here are a few highlights to consider:
- There is no cost to apply;
- The financial support is to assist small businesses retain workers, maintain payroll and cover expenses such as rent, mortgage, and utilities;
- The loan will assist covering expenses dating back to February 15th-June 30, 2020;
- The loan can be forgiven and can be turned into a non-taxable grant.
You may find details on the max loan amounts, terms, application process, and loan forgiveness by clicking here.
To stay updated as this act unfolds, you may check back with the official SBA website.
ECONOMIC INJURY DISASTER LOAN
The EIDL program loans up to $2 million of financial assistance to small businesses or private, non-profit organizations that have suffered substantial economic injury as a result of a declared disaster, regardless if the applicant sustained physical damage.
You, (your business) may also be eligible for the EIDL (Economic Injury Disaster Loan) as COVID-19 pandemic was deemed a qualifying event. On March 19th, the SBA declared a disaster for the state of Michigan qualifying our state small businesses access to low-interest loans backed by the SBA.
An update posted on Grow.org about EIDL is they have removed the credit requirements and the deferment period to 11 months now with the first payment due on the 12th month.
Grow.org provides small businesses with local, up to date resources during COVID-19 no matter what stage your business is in.
THE RIGHT PLACE- MICHIGAN SMALL BUSINESS RELIEF GRANT
For those of you that are local to Michigan, you will want to apply for the Michigan Small Business Relief Grant. The Right Place has been awarded $1,000,000 in grant funds to provide financial relief to local small businesses for up to $10,000. Applications for funding are now being accepted. You will find additional information on their website.
No matter what stage your business is in, my hope is that one of these programs outlined here has given you the encouragement you need to move forward. If you would like to be referred to someone in my network who specializes in these types of loans, don’t hesitate to reach out to me. I would welcome the opportunity to continue serving the small business community in the city I love, Grand Rapids, Michigan.