Small Business COVID-19 Recovery Info

Small Business COVID-19 Recovery Info

Overview

To mitigate the effects of COVID-19 on small businesses, the State and federal governments are offering loans and grants to small businesses, self-employed workers, and non-profit organizations. federal and State grant and loan programs are designed to work in concert with one another to maximize emergency relief. This fact sheet was created to summarize  the various federal and State grant and loan programs designed to provide financial relief to businesses and organizations. (Scroll down to each section for links.)

Baltimore City Programs

Federal Programs 

State of Maryland Programs 

 Basic Documents Needed for Federal and State Applications

  • Two years of financial statements and most recent interim statement to benchmark revenue against (if available).
  • A six-month pro forma of estimated lost revenue or other documentation and evidence demonstrating a loss.

 1 to 1 Assistance for Central Baltimore Businesses, Self-employed Workers and Non-profits

CBP has assembled a group of volunteers versed in business underwriting who can assist in completing any of the above loan applications. If you need assistance, contact Jack Danna at jdanna@centralbaltimore.org

SBA Economic Injury Disaster Loan (Federal Government)

What is the purpose of the SBA Economic Injury Disaster Loan?

The SBA’s Economic Injury Disaster Loan (EIDL) program provides small businesses with loans to support working capital up to $2 million to help overcome the temporary loss of revenue. Loans may be used to pay fixed debts, payroll, accounts payable, or other bills that can’t be paid because of the COVID-19 outbreak.

 What businesses are eligible?

  • Businesses directly affected by the disaster
  • Businesses that offer services directly related to the businesses in the declaration
  • Other businesses indirectly related to the industry that are likely to be harmed by losses in their community
  • Examples of eligible industries: restaurants, retailers, manufacturers, recreational facilities, owners of rental property, and wholesalers

What are the loan terms? 

  • Eligible entities may qualify for loans up to $2 million
  • The maximum unsecured loan is $25,000
  • The interest rate is 3.75 percent for small businesses without credit available elsewhere, and businesses with credit available elsewhere are not eligible to apply for assistance
  • The maximum term is 30 years
  • Credit history acceptable to SBA
  • The ability to replay the SBA loan

What are eligible uses?

  • Loan proceeds can be used for working capital expenses, including rent, payroll, utilities, health insurance premiums, or fixed debts.
  • Assistance cannot be used to refinance old debt, for dividends or distributions to members or shareholders, or to pay tax penalties.

 Where can I get more information?

Applicants do not go through a bank to apply.  Instead apply directly to SBA’s Disaster Assistance Program at: https://covid19relief.sba.gov/#/

Economic Injury Disaster Advance Loan (Federal Government)

What is the purpose of the Economic Injury Disaster Advance Loan (EIDL)?

The SBA’s Emergency Injury Disaster Advance Loan (EIDL) provides qualifying small businesses with a $10,000 advance on an EIDL loan application. This advance is forgivable and if denied an EIDL loan the $10,000 advance is forgiven. This loan advance is to provide immediate relief to address reduced cash flow resulting from economic injury and disasters, which now includes the COVID-19 pandemic in designated states under the CARES Act.

What businesses are eligible?
  • Generally, EIDL Loans are available to businesses with fewer than 500 employees that have been in continuous operation since January 31, 2019.
  • Sole proprietors, single member LLC/sole shareholder corporations are also eligible.
  • To apply for the EIDL Loan, a business must show its revenue has been adversely affected by COVID-19.

What are the loan terms? 

  • Upon receipt of an EIDL Loan application, SBA lenders may disburse loan advances in amounts not to exceed $10,000 within 3 days of the lender’s receipt of an application.
  • The SBA currently estimates that the full amount of the approved EDIL loan proceeds will be distributed approximately thirty (30) days after an approval.

 What are eligible uses?

  • Loan proceed can be used for working capital expenses, including rent, payroll, utilities, health insurance premiums, or fixed debts.
  • It cannot be used to refinance old debt, for dividends or distributions to members or
  • shareholders, or to pay tax penalties.

 Where can I get more information?

Apply for the Loan Advance:  https://covid19relief.sba.gov/#/

https://www.grsm.com/publications/2020/economic-injury-disaster-loans-answers-to-frequently-asked-questions

Paycheck Protection Program (CARES Act )

 What is the purpose of the Paycheck Protection program?

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. This loan program was created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act – stimulus legislation). If certain requirements are met, a loan may be forgiven (see below).

What businesses are eligible?

  • Small businesses with fewer than 500 employees
  • Select types of businesseswith fewer than 1,500 employees
  • 501(c)(3) non-profits with fewer than 500 workers
  • Some 501(c)(19) veteran organizations
  • Self-employed workers, sole proprietors, and freelance or gig economy workers
  • Businesses, even without a personal guarantee or collateral, can apply for one of these loans if operational on February 15, 2020, and had paid employees at that time (even if the owner is the only employee)
  • SBA’s 500-employee threshold includes all types of employees: full-time, part-time, and any other status

What are the loan terms? 

  • Loans under the Paycheck Protection Act can be 2.5 times the borrower’s average monthly payroll costs, and they cannot exceed $10 million.
  • The interest rate for Paycheck Protection loans are set at 0.5% and loans mature after two years.
  • No personal guarantee or collateral is required.
  • Lenders are expected to defer fees, principal and interest for no less than six months and no more than one year.
  • Loan payments will be deferred for six months
  • SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
  • The Paycheck Protection Program will be available through June 30, 2020.

 Where can I get more information?

https://home.treasury.gov/cares.

https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

Maryland Small Business COVID-19 Emergency Relief Loan Fund (State Government)

What is the purpose of the COVID-19 Emergency Relief Loan Fund?

This $75 million loan fund offers working capital and assistance intended to provide interim relief complementing other emergency relief actions with banks, financial partners, and business interruption insurance.

What are the loan terms? 

  • Loans up to $50,000 (not to exceed three months of cash operating expenses) open to Maryland businesses impacted by the COVID-19 with fewer than 50 employees
  • 0% for the first 12 months, and 2% for the remaining 36 months
  • Deferral of any payments for the first 12 months, and straight amortization beginning in the 13th month through the 36th month
  • No collateral requirements

What businesses are eligible?

  • Business must be established prior to March 9, 2020 and in good standing.
  • Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e. W-2 employees).
  • A business needs a minimum personal credit score of 575.
  • The business must demonstrate financial stress or disrupted operations, which may include but are not limited to:
  • Notices from tenants closing operations and not paying rent caused by loss of income
  • Notice of inability to pay rent or make loan payments due to reduced sales, suspended operations
  • Increased cost related to COVID-19 prevention measures
  • Notice of disrupted supply network leading to shortage of critical inventory or materials
  • Other circumstances subject to review on a case by case basis

What are eligible uses?
Eligible uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations.

Where can I get more information?

https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-loan-fund

Maryland Small Business COVID-19 Emergency Relief Grant Fund

 What is the purpose of the COVID-19 Emergency Relief Grant Fund?

This $50 million Grant Fund – forgivable –offers working capital to assist Maryland small businesses and nonprofits with disrupted operations due to COVID-19. Grant assistance is intended to provide interim relief complementing actions with its bank, business interruption insurance, and financial partners.

 What businesses are eligible?

  • A business must be established prior to March 9, 2020.
  • Applicants must have employees on their payroll for whom they have had payroll taxes withheld (i.e. W-2 employees).
  • Annual Revenues of the business or nonprofit not to exceed $5 million as evidenced by Financial Statement or other financial documentation.
  • Business or nonprofit is expected to seek longer term funding through its bank, SBA, or other sources.

The business or nonprofit must demonstrate financial stress or disrupted operations, which may include but are not limited to:

  • Notices from tenants closing operations and not paying rent caused by loss of income
  • Notice of inability to make loan payments due to reduced sales, suspended operations
  • Increased cost related to COVID-19 prevention measures
  • Notice of disrupted supply network leading to shortage of critical inventory or materials
  • Other circumstances subject to review on a case by case basis

 What are the loan terms? 

Grants are up to $10,000 not to exceed 3 months of cash operating expenses for Maryland businesses and nonprofits impacted by COVID-19 with 50 or fewer employees.

What are eligible uses?

Eligible uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations.

Where can I get more information?

https://commerce.maryland.gov/fund/maryland-small-business-covid-19-emergency-relief-grant-fund

Maryland COVID-19 Emergency Relief Manufacturing Fund

What is the purpose of the COVID-19 Emergency Relief Manufacturing Fund?

This $5 million incentive program helps Maryland manufacturers to produce personal protective equipment and other items identified as critical needs items by the Maryland Emergency Management Agency and Maryland’s Department of General Services that are urgently needed by the State of Maryland to serve in state hospitals, healthcare facilities, and emergency/first responders.

What businesses are eligible?

Applicants must be an established Maryland business and demonstrate experience, technical expertise and financial stability to implement the proposed project.

What are the loan terms? 

  • Grants of up to $100,000 will be made available to manufacturers to 1) increase existing capacity to produce these critical need items or 2) quickly pivot operations to produce these critical need items.
  • Grant awards will vary based on the applicant’s total investment.
  • Funds will be disbursed as follows: 50% at notice of award, with remaining 50% paid upon completion with proof of expenses.
  • Business must be located and plan to manufacture the products in Maryland.

What are eligible uses?
Eligible costs include but are not limited to capital expenses such as machinery and equipment, raw materials needed for production, and operating expenses associated with increased production.

Funding decisions will be made based on a variety of evaluation criteria but not limited to technical capability, operational experience, and the priority purchasing needs of the State of Maryland, with priority given to the product areas of greatest need within the Maryland healthcare system.

Where can I get more information?

https://commerce.maryland.gov/fund/maryland-covid-19-emergency-relief-manufacturing-fund

Additional Resources

Goldman Sachs Commits $300 Million to Support Small Businesses and communities: https://www.goldmansachs.com/media-relations/press-releases/current/announcement-2-apr-2020.html

Restaurant Employee Relief Fund – $500 grants to restaurant employees affected by COVID-19. https://rerf.us/apply-for-aid/

ECOMAP Baltimore – an all-encompassing depository of resources for businesses, artists, non-profits.

https://baltimore.ecomap.tech/portal/covid-resources

To receive regular updates on Small Business Administration resources please register at:  www.SBA.gov/Updates

CARES Act Updates to share with employees: https://docs.google.com/document/d/1Lsm6vVhR0zY16yHCtGYD9m1AKi4lhhtcNZg1okwNpf4/edit 

Thank you

This small business fact sheet was compiled by Andy Frank; Michael Pokorny, Reinvestment Fund; and Jack Danna, Central Baltimore Partnership. Special thanks to the CBP’s Emergency Small Business Task Force. 

Respectfully,

Jack Danna, jdanna@centralbaltimore.org

Central Baltimore Partnership.