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The federal government’s Paycheck Protection Program provided small-business owners with just under $800 billion in COVID-19 relief, according to the U.S. Small Business Administration.
The PPP concluded on May 31, but as businesses forge ahead in the recovery process, they may find a continued need for affordable financing. Here are some of the government funding options that are still available — and how to get them.
How Much Do You Need?
COVID-19 Economic Injury Disaster Loans
If your business lost money as a result of the pandemic, you may be eligible for a COVID-19 Economic Injury Disaster Loan. The SBA can issue these loans through Dec. 31 of this year, or until funds run out, whichever is sooner.
New changes to the program have increased the maximum available loan amount from $500,000 to $2 million, extended the payment deferment period to 24 months for all loans and expanded the use of funds to include payment of nonfederal and federal debt.
COVID-19 EIDLs are funded by the SBA directly — but unlike PPP loans, they cannot be forgiven.
However, businesses in low-income communities may be eligible for a COVID-19 EIDL advance of up to $15,000 that does not need to be repaid. Business owners can get an advance without getting a loan.
You can apply for a COVID-19 EIDL for free using the SBA’s online portal — and if your business is eligible for an advance, the SBA will reach out to you directly to submit an application.
SBA 7(A) Loans
Although not unique to pandemic relief, SBA 7(a) loans can offer long-term affordable financing to qualified businesses.
Recent updates to the 7(a) loan program have waived the upfront guarantee fee for loans under $350,000, effective through September 2022. The maximum funding amount for the SBA Express loan — which offers a faster turnaround time than standard 7(a) loans — has also been permanently set at $500,000, up from its pre-pandemic amount of $350,000.
With any type of SBA 7(a) loan, however, you’ll likely need good credit, strong revenue and a few years in business to qualify.
The challenge that some businesses are having is an inability to show historical cash flow due to pandemic effects, said Jodi Rathbun-Briggs, senior vice president and chief lending officer at Greylock Federal Credit Union in Pittsfield, Massachusetts, via email.
“Borrowers should have well-thought-out recovery plans and thorough discussions with their banker regarding those plans,” she said.
The SBA offers a Lender Match tool on its website to connect potential borrowers with lenders within two business days. You might also contact a local bank in your community or one with which you have an existing relationship to see if it offers SBA 7(a) loans.
Local loan and grant programs
States and cities continue to implement their own COVID-19 relief programs, as well as roll out new ones. The city of Chicago, for example, recently announced the launch of the Chicago Creative Worker Assistance Program, which has allotted $2.3 million in grant relief to artists and creative workers that suffered lost income due to the pandemic.
Similarly, the California Rebuilding Fund has provided loans to more than 700 small businesses — and in September, announced the addition of $56.5 million of available capital. The program offers low-interest loans to eligible businesses across the state, distributing them through a network of community lenders.
In general, community lenders like community development financial institutions, or CDFIs, can be a great option for affordable financing, particularly for traditionally underserved businesses, such as those operating in low-income areas, minority-owned businesses or women-owned businesses.
It’s worthwhile to look at CDFIs from both a geographic and sector angle, says Randell Leach, CEO of Beneficial State Bank, a CDFI with locations in California, Oregon and Washington. If you’re a natural food store, for example, there’s a good chance you’ll find a CDFI that’s focused on that, he says.
Business owners can search state or city government websites and reach out to local representatives or industry groups to find grant and loan programs in their area that they might qualify for. To find CDFIs in your region, or those that might be relevant to your business sector, you can browse the official list of certified CDFIs on the U.S. Department of the Treasury’s Community Development Financial Institutions Fund website.
Organizations like SCORE and local Small Business Development Centers also offer access to free recovery resources and can help business owners identify potential funding opportunities.
Don't forget about PPP forgiveness
Over 11 million PPP loans were approved, and as of Oct. 3, approximately 7.5 million applications for PPP loan forgiveness have been submitted, according to the SBA.
Loan forgiveness won't offer your business additional funding. But it will ensure you can put money you already have toward expenses rather than PPP loan payments. If you received a PPP loan, you have until the loan's maturity date to apply for forgiveness.