We all know how devastating the covid-19 pandemic has been for both companies and employees alike. Small business owners that were on their way to turning a profit this year now find themselves having to layoff workers just so they don’t have to close their doors. But there is some relief on the horizon. The CARES act, officially the Coronavirus Aid, Relief, and Economic Security Act, was signed into law over two weeks ago. It provides grants and loans for businesses. We’re going to look at three programs that can help small businesses and their employees.
Economic Injury Disaster Loan – Businesses who are suffering losses because of covid-19 can apply for an Economic Injury Disaster Loan. EIDLs are lower interest loans of up to $2 million, with principal and interest deferment at the Administrator’s discretion, that are available to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses. You will need to have payroll information for this year. If you don’t know who has this information, or where it’s stored at your company, you probably need help with your processes and procedures. This is the type of information you, as a business owner, should be able to access quickly.
Emergency Economic Injury Grants – These are similar and related to the EIDL, but they’re different in a key way. These grants are intended to be quick infusion of cash to a business. Three days after applying for a Small Business Administration EIDL a business owner can receive the grant money. First, apply for the loan, and request the grant. Congress has capped the grants at $10,000. There’s been some indication that most of the grants being given out are much lower than $10,000, but applying is the first step.
Paycheck Protection Program (PPP) Loans – There are are a lot of programs that comprise the CARES Act, but the PPP loan program seems to have received a lion’s share of the attention. Congress set aside around $350 billion for small business owners to keep paying their employees even if their business shuts down. According to the Senate Small Business Committee, “The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis.”
VersaTel Solutions will be helping our clients apply for CARES Act programs. If you’re not a customer, or if you’re realizing you need our new Process Management service please reach out to us to see how we can help you.