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Small Business Loan & Grant Facilities

| March 25, 2020
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In the wake of the Coronavirus pandemic, small businesses are looking to secure liquidity to remain solvent. Below is a list of loan and grant facilities announced by the federal government via the Small Business Administration and several states to support small businesses. We'll do our best to update this list as more information becomes available.

Federal Programs

  • Small Business Administration (Paycheck Protection Program)https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
    • An extension of the conventional 7(a) program
    • Allows businesses with fewer than 500 employees to apply for loans up to the lesser of 2.5x average monthly payroll costs or $10 million
    • Loans must cover payroll costs, mortgage interest, rent, utilities and are made on a nonrecourse basis with no personal guarantees
    • Interest rate is initially 1% (with a cap of 4%) and a maturity of 2 years
    • Businesses are eligible for tax-free forgiveness of some or all of the principal amount borrowed if proceeds are used for qualifying expenditures during the eight-week period following the loan funding date
      • Forgiveness is based on employers maintaining or quickly rehiring employees and maintaining salary levels, and will be reduced if full-time headcount declines, or if salaries and wages decrease
      • It's expected that at least 75% of costs forgiven come from payroll
    • Preliminary application can be found here: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
    • Locate an approved SBA lender here: https://www.sba.gov/paycheckprotection/find
  • Small Business Administration (Economic Injury Disaster Loan Program)https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
    • Loans of up to $2 million, depending on economic damages and the ability to repay
    • Interest rates are capped at 4% and repayment terms are up to 30 years
    • Small (<$200k) loans are available without personal guarantees
    • Loans are not subject to forgiveness
    • Loan proceeds may be used for expenses other than payroll, interest, rent or utilities

State Programs

  • MD: https://govstatus.egov.com/md-coronavirus-business
    • The Maryland Department of Commerce is offering three new business assistance programs in response to the COVID-19 pandemic:
      • Maryland Small Business COVID-19 Emergency Relief Loan Fund - This $75 million loan fund offers no interest or principal payments due for the first 12 months, then converts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per annum. Learn more.
      • Maryland Small Business COVID-19 Emergency Relief Grant Fund - This $50 million grant program offers grant amounts up to $10,000, not to exceed 3 months of demonstrated cash operating expenses for the first quarter of 2020. Learn more.
      • Maryland COVID-19 Emergency Relief Manufacturing Fund - This $5 million incentive program helps Maryland manufacturers to produce personal protective equipment (PPE) that is urgently needed by hospitals and health-care workers across the country. More information coming by Friday, March 27, 2020.
      • If you have specific questions about these funds, please email fpaaworkflowcoordinator.commerce@maryland.gov.
  • DC: https://coronavirus.dc.gov/recovery-business
    • DC Small Business Recovery Microgrants program: https://coronavirus.dc.gov/dc-small-business-recovery-grants
      • Pursuant to the “COVID-19 Response Emergency Amendment Act of 2020” effective March 17, 2020 (D.C. Act 23-247), the DC Small Business Recovery Microgrants Program will offer grants to small, local businesses, independent contractors, self-employed individuals, and nonprofits to meet their short-term financial needs. The grant can cover employee wages and benefits (including fringe benefits associated with employment, such as health insurance), accounts payable, fixed costs, inventory, rent, and utilities.
  • VA: (see SBA programs) https://www.virginia.gov/coronavirus-updates/
  • PA: (see SBA programs) https://dced.pa.gov/funding-programs/ 
  • NY:  https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page
    • NYC Employee Retention Grant Program: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program
      • The City is offering small businesses with fewer than 5 employees a grant to cover 40% of payroll costs for two months to help retain employees.
    • NYC Small Business Continuity Loan Fund: 
      • Businesses with fewer than 100 employees who have seen sales decreases of 25% or more will be eligible for zero interest loans of up to $75,000 to help retain employees and ensure business continuity.
      • Businesses must:
        • Be located within the five boroughs of New York City
        • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue
        • Employ 99 employees or fewer in total across all locations
        • Demonstrate ability to repay the loan
        • Have no outstanding tax liens or legal judgements
  • CA: https://www.ibank.ca.gov/small-business-finance-center/
    • Los Angeles microloan program: https://www.lamayor.org/mayor-garcetti-announces-economic-relief-package-small-businesses-impacted-novel-coronavirus
      • As part of the program, which was approved by the Los Angeles City Council, the Economic and Workforce Development Department will provide $11 million in no-fee microloans of $5,000 to $20,000 — which may be used to cover working capital. Since cash flow is critical at this unprecedented time, the program will offer relaxed underwriting with no credit score minimum, a generous allowance to meet debt service, and a 100% Loan to Value ratio. The interest rate can either be 0% for a term of six months to one year, or 3% to 5% for a term of up to five years. 
  • FL: http://floridajobs.org/rebuildflorida/businessrecovery
    • Small Business Emergency Bridge Loan - small business owners with two to 100 employees located in Florida affected by COVID-19 can apply for short-term loans up to $50,000
    • These loans are interest-free for up to one year and are designed to bridge the gap to either federal SBA loans or commercially available loans
      • The Interest rate will be 12% per annum on the unpaid balance thereafter, until the loan balance is repaid in full
    • For more information on the Rebuild Florida Business Loan Fund please call 833-832-4494 or email FloridaBusinessLoanFund@deo.myflorida.com

This material is for use with the general public and is designed for informational or educational purposes only.  The information and views provided in this material do not necessarily reflect the views or opinions of Lincoln Financial Group or Lincoln Financial Advisors.  It is not intended as legal, tax, estate or investment advice.   Lincoln Financial Advisors and their respective employees, representatives, and/or insurance agents do not provide estate, tax, accounting, or legal advice. Individuals should consult an independent lawyer or advisor as to any tax, accounting, or legal statements made herein.

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