A huge part of last week’s CARES legislation included relief for small businesses, including SBA grants for subsidizing payroll, rent, & utilities for 8 weeks. It starts out like a loan, but will be forgiven upon proof that you used it for those qualifying expenses. Free money! This is not an April Fool’s joke! It applies as long as the business was operating on January 31, and doesn’t matter whether you are open or closed right now, a slong as you can certify in good faith that the uncertainty of current economic conditions makes the loan request necessary to support ongoing operations.
You can apply right now at sba.gov for a $10,000 advance toward this, which supposedly will be direct deposited to you within 3 days. Normally SBA loans are done through lenders, but this is done directly through the SBA website.
Congress appropriated a finite amount of money for this, so once the money runs out, you may be out of luck.
This is from the SBA website:
Economic Injury Disaster Advance Loan
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.
Here is a nice summary of the law that the US Chamber of Commerce put together.
Borrowers are eligible to have their loans forgiven equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan:
- Payroll costs (including lost net income for sole proprietors)
- Interest on the mortgage obligation incurred in the ordinary course of business
- Rent on a leasing agreement
- Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
- For borrowers with tipped employees, additional wages paid to those employees
The loan forgiveness cannot exceed the principal.