Relief for Small Businesses in the COVID-19 Crisis

The coronavirus pandemic has hit small businesses hard. Fortunately, there are resources for help. See what’s out there to help your small business.
Relief for Small Businesses in the COVID-19 Crisis
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The coronavirus pandemic has upended small businesses around the world. With social distancing initiatives in place, businesses are suffering, and the brunt of that is affecting small local companies.

Amidst this stress and turmoil, many organizations, both public and private, have risen to the occasion and are administering relief programs, grants, and loans for struggling small businesses.

We’ll lay out those resources here.

Resources from the federal government

U.S. Small Business Administration (SBA)

The SBA provides low-interest disaster loans to help businesses and homeowners recover from declared disasters.” 

"Struggling small businesses can apply for a loan of up to $2 million."

Because this pandemic qualifies as a declared disaster, struggling small businesses can apply for a loan of up to $2 million. This can help small businesses mitigate the damaging effects of revenue loss due to this crisis.

What is an Economic Injury Disaster loan?

These loans are somewhat self-explanatory. Economic Injury Disaster Loans’ purpose is to provide temporary financial relief to small businesses suffering economic injury due to a declared disaster.

A disaster loan is a low-interest loan guaranteed by the United States Small Business Administration for businesses in areas affected by a disaster. The outbreak of COVID-19 has been declared a disaster, so, as of March 26, 2020, businesses in all U.S. states and territories are eligible to apply for one of these loans.

Keep in mind that these loans are guaranteed by the SBA, not fulfilled by them, so you’ll have to involve a traditional lender in the process.

What can I use the loan for?

Again, the purpose of the loan is to help small businesses overcome temporary loss of revenue due to a disaster. The guideline on how the loan can be used is relatively broad, but it can be used to allow your company to resume normal operations. 

This could mean paying your people, stocking inventory, paying obligations, or maintaining a working capital among other things.

How can I qualify for the loan?

First, you have to qualify as a small business. The term “small business” varies depending on the industry and is calculated based on employee count and average annual revenue. See the SBA Size Standards Tool or Electronic Code of Federal Regulations to see if you qualify as a small business.

Keep in mind that for these purposes, employee count includes affiliates and contractors.

You also have to be located in an area affected by a declared disaster. As mentioned, all states, Washington D.C. and U.S. Territories qualify as disaster during the COVID-19 crisis.

"Employee count includes affiliates and contractors."

How much of a loan can I qualify for?

The highest amount the SBA is offering for these loans is $2 million. You can apply for a loan to cover losses up to that number, but the SBA will decide how much they will guarantee.

What are the terms of the loan?

The SBA is offering up to $2 million to qualified businesses with an interest rate of 4% or less. The maturity and interest rate of the loan will depend on the creditworthiness of the company and its ability to repay the loan.

Where can I apply?

You can apply through the SBA website at this link.

Obviously, this is a stressful situation, and time is of the essence, so we’d recommend applying online. 

If you’re applying online, just download the forms, fill in your information, then upload them back onto the application tool. 

What do I need in order to apply?

The details and documents are explained at this link. There are a lot of documents and information to be gathered, so take some time to prepare before starting your application.


The Small Business Administration offers disaster loans to companies in any area where there is a disaster affecting small business.

In addition, congress passed an act that further aids small businesses during the coronacrisis.

The act is called the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) and is also known as the Paycheck Protection Program.

This program provides federally guaranteed loans to small businesses who need help making payroll through the crisis.

These descriptions of the CARES act come from a document published by the Chamber of Commerce which can be found here.

Do I qualify for the CARES ACT?

There are a few requirements that define whether or not you qualify, most of which have to do with company size. 

To qualify, your business must employ fewer than 500 employees regardless of full-time, part-time or any other status, and it must have begun operations before Feb. 15, 2020. You also may qualify for this program if you are self-employed, or operate as a contractor. 

If your business is in the food or accommodations industry, the 500 employee rule applies per physical location. 

In addition to these requirements, you must declare on your own good faith that the loan is necessary for normal operations due to the crisis. You must also declare that you will use the loan to pay employees, or make mortgage, lease, or utility payments.

Finally, you cannot have another loan pending for the same purpose and amount or have already received a loan for the same purpose and amount. 

How much can I borrow?

The purpose of the bill is to help small companies get through the next 2.5 months. That being the case, you may receive 2.5 times your average monthly payroll costs as defined below.

The U.S. Chamber of Commerce gives a simple formula and explanation for calculating how much you may qualify for as described here.

Payroll Costs

Can the loan be forgiven?

Yes, a loan granted under the CARES Act can be forgiven up to the amount spent on payroll, mortgage, rent, utilities, and extra wages paid to tipped employees.

The amount forgiven can be reduced if the number of employees is reduced or the amount of wage paid is reduced by more than 25%.

You can avoid this reduction by reinstating the original number of employees and wage dollar amounts by June 30, 2020.

This act is very new, and the SBA is still working through the terms. This article will be updated as those developments happen.

The government provides many loan opportunities for struggling businesses. is a single place where businesses can find and apply for all sorts of business loans depending on their circumstances.

Internal Revenue Service (IRS)

The IRS is giving some relief by allowing non-corporate taxpayers to defer paying federal income tax up to $1 million until July 15, 2020, without any penalties. They are also allowing corporate taxpayers to defer paying these taxes of up to $10 million until July 15, 2020. 

"The IRS is giving some relief by allowing non-corporate taxpayers to defer paying federal income tax."

Keep in mind that this does not change the date by which you need to file for taxes. That deadline remains April 15.

The Federal Reserve

The Federal Reserve has taken massive actions to reduce the economic impact of COVID-19 including a credit “discount window.” They have reduced interest rates on loans to practically zero for individuals and businesses. They are taking more actions every day to minimize the economic impact of this virus.

Help from State and Local Governments

State and local governments are providing relief all over the country. If you’re curious about what’s available on a state level, use this spreadsheet that Gusto has created in order to track those relief programs.

Resources from Private organizations

Facebook announced that they’re setting up a $100 million grant program for small businesses around the globe. This money will be distributed as cash and ad credits between 30,000 selected companies who apply for the grant.

Facebook is setting up a $100 million grant program for small businesses.

Microsoft is offering a free 6-month Office 365 E1 trial. This will help with the increased need for employees to work from home for companies that would otherwise be crippled by the transition.

Uber Eats is helping out local restaurants and shops by waiving the fee to deliver from those locations. Many states have closed restaurants completely except for delivery and takeout. This has hit local restaurants especially hard. By making it easier to deliver food, Uber Eats is helping them stay afloat.

Google is helping businesses and schools by rolling out free access to their G-suite apps, especially Google Hangouts. This makes remote work and school much easier for businesses and schools to manage.

Amazon, in response to the flux of online shopping, has opened 100,000 positions in its fulfillment centers. They’re also welcoming employees who have been displaced from their primary jobs until their employers can take them back.

Amazon welcomes employees who have been displaced from their primary jobs until their employers can take them back.

Resources for individuals

The Internal Revenue Service (IRS)

The IRS is also providing some flexibility with individual taxpayers this tax season. They encourage all taxpayers to still file by April 15 in case they qualify for a refund, but they have deferred the date by which taxpayers need to pay taxes.

Consumer Financial Protection Bureau (CFPB)

The CFPB has provided an in-depth resource for individuals struggling with paying their bills and loss of income. It can be a complicated situation, but the CFPB plainly describes how individuals can get through financial troubles better.

Families First Coronavirus Response Act

This new law expands coverage and eligibility for paid sick leave. This law shortens the unpaid period of emergency paid time off. It also allows employees who have been employed at a company for at least 30 days to qualify for family or medical leave without risking the loss of their job.

The Families First Coronavirus Response Act expands coverage and eligibility for paid sick leave.

As you can expect, laws are complicated, so see this article for a deeper dive into what it does.


It’s a crazy time, but there are a lot of individuals, businesses, groups, and government organizations that are doing a lot of good. Amidst the stress and fear that is penetrating society, look for the beauty in the good that people do as a response. 

We are optimistic about our country’s ability to become stronger from this trial. We share Billionaire Mark Cuban’s confidence that “as bleak as it can seem right now… we’ll get to the other side, I’m 100 percent certain, and we’ll be different when we get there.”

Many companies have more time on their hands than work to be done right now. We, again along with Mark Cuban, advise that you take this opportunity to revamp processes. Take this as an opportunity to do some company spring cleaning. 

Stay busy so that when all of this is over, you’re poised to take advantage of the economic upswing.

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