Dear Friends and Neighbors,
We wanted to make sure you are aware of new resources available for small businesses struggling to stay afloat during the ongoing COVID-19 pandemic and the resulting economic pain.
Stay well,
Small Business Emergency Grant Program
Governor Inslee has created a Working Washington Small Business Grant program using a portion of the state’s Strategic Reserve Fund (SRF). The Department of Commerce has just released the program’s guidelines and application. Visit this link for more information and to apply for the grant.
Grants will provide up to $10,000 for small businesses under 10 employees. Businesses can use this money to pay for rent, utility bills, supplies, inventory and other operating expenses.
Additionally, the federal government recently responded to the growing COVID-19 pandemic by passing the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), our nation’s largest ever emergency relief funding package.
The legislation immediately makes available new tools through the Small Business Administration to help our small businesses and workers survive the devastating economic effects they are experiencing.
? Paycheck Protection Program ?
The Paycheck Protection Program (PPP) is a $349 billion SBA-administered loan program intended to help organizations keep employees on payroll between now and the end of June 2020. The application window opened on April 3 and funds will be distributed on a first-come, first-served basis. Starting April 10, sole-proprietors, independent contractors, and other self-employed individuals are also eligible to apply.
Funds can be used for salaries and other payroll expenses, rent and utilities, mortgage interest and interest on other debt secured before Feb. 15, 2020. While the program is administered by the SBA, all applicants will need to apply with authorized lenders. A list of some of those lenders can be found here, and if your banking institution is not currently authorized they can apply to become a qualified lender.
The program is designed to help small businesses and workers. Loans can be forgiven if recipients maintain their staff and payroll after receiving the loan and use at least 75% of the funds for payroll expenses, effectively converting loan to a general operating grant.
? Economic Injury Disaster Loans and Grants ?
Economic injury disaster loans and grants provide targeted, low-interest loans of up to $2 million to small businesses and non-profits (including sole proprietors and independent contractors). The CARES Act also allocated $10 billion to provide $10,000 grants to applicants.
These grants provide an emergency advance to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
However, if you end up applying for the Paycheck Protection Program, any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the PPP and you cannot use your EIDL for the same purpose as your PPP loan.
Your SBA District Office is an important resource when applying for SBA assistance.
? Struggling to get started? ?
The following questions might help point you in the right direction. Do you need:
- Capital to cover the cost of retaining employees? Then the Paycheck Protection Program might be right for you.
- A quick infusion of a smaller amount of cash to cover you right now? You might want to look into an Economic Injury Grant.
- Just some guidance to help you navigate this uncertain economic time? Check out SBA’s COVID-19 resource guide.