On March 27th, Congress passed and the President signed the CARES Act, which was a $2 TRILLION stimulus bill meant to help people survive during the Coronavirus crisis. There are a number of components to it, but this post will only address what it means to Small Business Owners and Independent Contractors. We will detail more of the bill in the weeks ahead.
Here are three things that Small Business Owners, who are hurt by the Coronavirus, should consider doing:
1.Apply for unemployment. Normally, small business owners and independent contractors could not receive unemployment, but the federal government changed that for the time being with the Coronavirus. Now small businesses and independent contractors are eligible to receive unemployment benefits. In addition, the federal government is increasing the weekly benefits by $600, in addition to the state benefit. You lose nothing if you apply and are denied, so I highly recommend that you apply.
2. Apply for something called EIDL (Economic Injury Disaster Loan), which is a program through the Small Business Association. What’s great about this is that you can apply for a $10,000 grant from the federal government that you will not have to pay back. However, if you take out more than that, then the excess (above $10,000) is a loan that you will have to pay back. You can apply for it here: https://covid19relief.sba.gov/#/
3. Consider applying for a small business loan. This is a loan, not a grant. However, if you use it to meet payroll (from my understanding, paying yourself is included), then the first 8 weeks will be forgiven. Also, it is being offered at a 1% interest rate, and doesn’t require you to pay it back for 24 months. So it’s a really low interest rate that you don’t have to pay back for 2 years, which is very nice. This will be offered through banks/credit unions, as part of the Small Business Association and it will probably be easiest to apply for it where you currently have a business bank/credit card account. Although you can still apply elsewhere, they just might put their current customers ahead of you and thereby delaying your loan processing.
If you’d like to read more, I found this guide from the Huffington Post very helpful.
The stimulus bill that they passed was quite large, and it’s only been 9 days since it was signed into law, so some of the details are still becoming more clear, as well as the government is offering additional guidance to parts of it that weren’t clear initially. Point being, there still may be more nuances and options as more time goes on. I will be sure to update this post if anything changes or there are other/additional options for small business owners to consider.
If you have any questions on how this legislation applies to your business, let’s chat: firstname.lastname@example.org