What You Need to Know About the Small Business Relief Programs During the COVID-19 Pandemic
This post is going to discuss more on the COVID-19 Small Business Relief Programs. If you have a small business that's greatly affected by this global COVID-19 pandemic, do read on.
It's all clear for months now; the virus outbreak is no longer a setting made for movies. The COVID-19 pandemic is now a reality that most countries in the world have to face. As of today, the US has the most reported infection cases, followed closely by Italy and China, the latter being the point of origin of the virus. Because of these health-threatening situations, all states encouraged everyone to stay at home. And when people stay home for the duration of the lockdown, small businesses suffer.
Because of this predicament, small businesses need the help of the government more than ever. When mentioning small businesses, it means those businesses that rely on recent sales and activities to keep their sales and transactions going. Without the people walking on the streets, the lifeline of their businesses inevitably deteriorates.
It's a good thing the government has come up with something to alleviate the stress of the business owners as well as to lessen the impact of the COVID-19 pandemic. But is it going to be beneficial to the small business owners? Is it a great help, or is it more of a risk in the long run? Find out more on these COVID-19 Small Business Relief Programs here.
THE DIFFERENT SMALL BUSINESS RELIEF PROGRAMS
As the global health crisis hits small businesses, both local and national governments of each state have come up with different ways to help out SMEs during this tumultuous time. Yes, not only one program, but plenty. Some of these programs have provisions while others have stimulus packages made possible by Congress. Below is a list of federal and state-supported Small Business Relief Programs, refined often to fit the needs of business owners as the pandemic progresses.
Paycheck Protection Loans
If you have a small business with under 500 employees, this one can help you financially. The U.S. Small Business Administration (or SBA) has come up with a program that can loan SME owners with interest rates of 4% below and with terms that can go up to 10 years. If your business qualifies for the program, you'd be able to borrow money as high as $10 million. The loans come from lenders, which include credit unions and banks. Also, if you're eligible, you'd be able to take advantage of a loan deferment for up to a year, as well as incentives given to those businesses that can keep with its payroll for eight weeks.
When you tried to apply for the program mentioned above and got denied, there's still a way. The SBA Economic Injury Disaster Loan provides emergency grants to small business owners of up to $10,000. This loan can help you get through the pandemic, providing monetary assistance to sick employees, use the money for rent, or keeping the payroll as it is. If you want to learn more about this grant or you want to look at more options, you can click on this link that leads you to the Small Business Administration relief programs.
Economic Injury Disaster Loans
If you need more than $10,000 to sustain your business, the Economic Injury Disaster Loans can help. The Injury Disaster Loans provide working capital to small and medium business owners with a loan of up to $2 million. This program is for those businesses who are deeply affected by the COVID-19 pandemic. The loans provided have an interest rate of 2.75% for non-profits while the rate is a bit higher for small businesses, which is 3.75%. For those eligible, the loans are payable within a 30-year range.
The SBA updated the program recently so that the sole proprietors and businesses with less than 500 employees can qualify and enjoy the loan. If you need to apply, you won't need to have a personal guarantee on loans $200,000 below. And, payments can be deferred for up to four years.
Tax Filing and Payment Deadline Extension
Good news to all who haven't done their taxes yet. The deadline for filing federal tax returns is now moved to July 15th, 2020. This is also the deadline for tax payments of up to $10 million for both individual and business taxes. To make sure, coordinate with your state tax agency so you'd know if your business qualifies with the extension. A couple of states have already organized their tax filing and deadline schedules while some may waive the payment or lessen the penalties for late filing and fees.
For Small Business Owners Based in Florida
The local government unit of Florida now has the Florida Small Business Emergency Bridge Loan Program. This program provides loans to Florida business owners of up to $50,000 or $100,000. This loan is for FL-based businesses affected by the pandemic. The amount of loanable money depends on certain exceptional cases, but the money should be for short-term funding of the company. The good thing about this loan program is that it is repayable when the business can get funds in alternative ways. Also, business owners can use the money without interest for a year. A word of caution: after a year, the interest rate goes up to 12%.
TheÂ Florida Small Business Emergency Bridge Loan Program is eligible for companies that have up to 50 employees. Also, businesses shouldn't have any existing bridge loans or must be paid off first before applying for this bridge loan. For anyone interested, you need to submit an application on or before May 8th, 2020. You also have to provide necessary documents, such as tax returns, bank statements and employer tax documentations, to name a few.
HOW TO KEEP YOUR BUSINESS AFLOAT?
The SMALL BUSINESS RELIEF PROGRAMS during this pandemic can help you and your business financially, but it can only help so far. This is also the time to think about how to keep your business going until this health crisis is over. Here are some fantastic tips on how to manage your company in this trying time of COVID-19 pandemic as well as optimizing the loans granted to you, if you've been given one.
Minimize Your Expenses - This goes without saying, but it's imperative to cut off some unnecessary expenditure on your business. Focus more on what matters - from maintaining the payroll and be able to provide the services up to your standards. Everything else should be placed in the back burner, at least for the time being.
Time To Pay Up - If there are some payments due, this is the best time to get rid of them. Sometimes, business owners tend to delay collections because they focus more on what they collect. But when you still have payments due, you need to eradicate them immediately so you won't have to worry about them in the uncertain future. Also, it gives your credit ratings a boost or at least maintains its good state.
Be Creative In Providing Services - In this time of crisis, foot traffic is virtually invisible. But it doesn't mean that you can't do business altogether. Find ways to reach out to your customers. For example, some restaurants are closed down for walk-in customers, but they still can provide services through delivery or take out options. You can team up with a food aggregator company such as DoorDash and let them do the delivery for you. Other restaurants also serve ready-to-cook meals so your customers will do the cooking instead. Take advantage of social media and reach out to your customers there.
Help Out - In this time of crisis, all we have is ourselves to help each other out. This is the best time to give back to the community. Provide food to essential employees as well as to those who need necessities to survive the pandemic. Since sales are slow during this time, it's good to give your products out, instead of having it rotten away (this is true, especially if you're in the food business).
Talk With Your Suppliers - Most businesses right now are in trouble, your suppliers included. This is the best time to negotiate with them and ask for special discounts in exchange for something. As this pandemic affects your suppliers, too, they'd be more than welcome to help you out rather than losing you as a loyal customer.
Keep Your Establishment COVID-19 Free - If you need to open up your business despite the pandemic, you have to make sure that your establishment is free from coronavirus. Hire THE BEST CORONAVIRUS (COVID-19) SANITIZING AND DISINFECTING COMPANY to help you keep you, your employees, and your customers safe from the invisible monster that we're dealing with right now.
Understand that things won't go back to normal anytime soon. Also, we don't know when we can completely eradicate the coronavirus. But with these SMALL BUSINESS RELIEF PROGRAMS and our passion for keeping our business alive despite everything that's happening, we're on the right track.