Coronavirus Resources for Small Businesses
As many small businesses are painfully aware, the federal loan programs for small businesses affected by the coronavirus have run out of money. The Paycheck Protection Program (PPP) loans and the Economic Injury Disaster Loans (EIDLs) have stopped taking applications due to applications exceeding funding.
But new money is coming soon. As of this e-alert, the US Senate had approved a new pot of money for the PPP and EIDL loans, with House approval expected later today. This action will put $300 billion into the PPP loan program and another $50 billion into the Emergency Economic Injury Disaster (EIDL) loan program. There is another $10 billion solely for the EIDL advances (the $10,000 grant from the Small Business Administration that does not have to be paid back.)
Because so many small businesses were crowded out of the PPP loan process by larger businesses, $60 billion of the new PPP loan money will be set aside for smaller and community bank customers. Some experts are recommending that small businesses who originally applied with a larger bank consider seeking out a community bank or credit union for a PPP loan to increase their chances of success.
The Federal Reserve has announced a new $600 billion program that will make loans to small businesses needing capital to preserve employees. The Main Street Lending Program will offer 4-year loans to eligible small businesses that were in good financial standing before the onset of the coronavirus pandemic. The Treasury has not released any details yet about how to apply. Principal and interest payments on the loans will be deferred for one year. We will provide more details on this program as they become available. For more information, please visit https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm.
Businesses that have applied for a PPP loan may also take out a loan under the Main Street Program. Like with the Paycheck Protection Program (PPP), a business will apply to a private lender for a Main Street loan.
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