Relief for Small Businesses and Nonprofits
FACT SHEET: RELIEF FOR SMALL BUSINESSES AND NONPROFITS
Paycheck Protection Program and Emergency Injury Disaster Loans and Grants
UPDATE: On April 23rd, Congress passed the Paycheck Protection Program and Health Care Enhancement Act, which includes:
- $310 billion in additional lending authority for the Paycheck Protection Program, with $60 billion set aside to support loans issued by community and mid-size lenders.
- $50 billion for separate disaster loans to small businesses and $10 billion in grants.
Paycheck Protection Program (PPP)
PPP, created by the CARES Act, provides fee-free loans up to $10 million dollars to cover payroll and other business expenses. Up to eight weeks of payroll and other approved expenses borrowed will be completely forgivable.
These loans are given through approved Small Business Administration (SBA) lenders in our communities. It is currently in effect for small businesses and non-profits, and will go into effect for sole proprietorships and independent contractors on April 10th.
- Small businesses with fewer than 500 employees or otherwise meet the SBA’s size standard, 501 (c)3 with fewer than 500 employees, individuals who operate as sole proprietors, independent contractors, folks who are self-employed who regularly carry out any trade or business, Tribal businesses that meet the SBA size standards, 501(c)(19) Veterans Organizations that meets the SBA size standard.
How to Apply:
- Businesses should gather the information needed to be ready to apply. You will need: SBA form 5, the most recent year’s taxes, signed IRS form 4506T, personal financial statement, schedule of liabilities, cash flow, and credit information.
- Contact your SBA approved lender and submit your application. You can find the list of approved lenders here.
- Not all lenders have implemented the program. If your preferred bank has not opened their application, you may have to wait for them to do so, or pursue PPP funding from another institution.
Economic Injury Disaster Loans (EIDL) and Grants
These are targeted, low-interest loans to small businesses and nonprofits that have been severely impacted by the coronavirus. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million.
**The CARES Act provides emergency grants of up to $10,000 to businesses that apply for EIDL Loans. The applicant only needs to self-certify that they are eligible to receive the EIDL loan.***
Who’s Eligible for EIDL Loans?
- Any Minnesota small business, nonprofit or co-op who does not have access to credit may apply.
Who’s Eligible for EIDL Emergency Grants?
- Independent contractors, the self-employed, private non-profits and small and medium sized businesses with up to 500 employees, including startups, cooperatives, and ESOPs. Those who are deemed ineligible for an EIDL loan will not have to return this grant.
How to Apply:
- Visit this website or contact your local Small Business Administration office. The SBA is adding capacity to help its website perform better due to increased demand.
- If you need help to complete your application, the Small Business Development Center can assist. You can also call my office: 651-846-2120.
- You will need: SBA form 5, the most recent year’s taxes, signed IRS form 4506T, personal financial statement, schedule of liabilities, cash flow, and credit information.
For More Information:
- Website: sba.gov/disaster
- Small Business Administration Disaster Assistance customer service center: 1-800-659-2955 or Minnesota SBA Offices: 651-370-2324
- Email: firstname.lastname@example.org
- Call my District Office: 651-846-2120
The Federal Reserve’s Main Street Lending Program
The Main Street Lending Program is designed to provide support to small and medium-sized businesses and their employees across the United States during the current period of financial strain by supporting the provision of credit to such businesses. The availability of additional credit is intended to help companies that were in sound financial condition prior to the onset of the COVID-19 pandemic maintain their operations and payroll until conditions normalize.
The Federal Reserve Bank of Boston has set up a special purpose vehicle (SPV) to purchase up to $600 billion of participations in loans originated by eligible lenders. Lenders will retain a percentage of the loans.
- U.S. businesses may be eligible for loans if they meet either of the following conditions: (1) the business has 15,000 employees or fewer; or (2) the business had 2019 revenues of $5 billion or less.
- Loans issued under the Program have a four year maturity, and principal and interest payments on the loans will be deferred for one year.
- Eligible lenders may originate new loans (under MSNLF and MSPLF) between $500,000 to $25 million or increase the size of (or “upsize”) existing loans (under MSELF) made to eligible businesses.
- Loans have an adjustable rate of LIBOR (1 or 3 month) + 300 basis points.
- Loans are not forgivable like PPP
For more information and frequently asked questions visit the Main Street Lending Program website.
For specific information for borrowers you can visit this page.
For specific information for lenders you can visit this page.
The CARES ACT encourages charitable giving by increasing the limitation on charitable deductions from 60% to 100%.
The Small Business Administration (SBA), in consultation with the Department of the Treasury has created a FAQ to help navigate PPP loans. You can find it here.
As businesses begin to reopen, practicing safe and healthy habits is important. See the CDC’s guidelines for reopening and cleaning here.
The U.S. Chamber of Commerce has created guidelines on eligibility for loans and assistance.
The Minnesota Chamber of Commerce has created a thorough toolkit for small businesses and organizations to navigate this challenging time. The toolkit includes webinars, resources, safety guidelines and more.
The Minnesota Department of Revenue is extending the grace period on Sales and Use Tax payments to May 20, 2020, for businesses identified in Minnesota Executive Order 20-04. If you have questions you can call 651-296-6181 or 1-800-657-3777, or email email@example.com.
The IRS has extended tax filing and payment deadlines and has set up resources for those impacted.
The Department of Treasury has created helpful fact sheets for borrowers, lenders, and other resources for small business owners.