The COVID-19 pandemic has hit many small business owners hard, and that includes a number of construction contractors. If you’ve been keeping up with the news — a difficult task these days — then you know the federal government is providing financial relief through the CARES Act, which was signed into law on March 27. The act established several temporary programs administered by the Small Business Administration (SBA) that are worth checking out.
Paycheck Protection Program
The purpose of this program is to help you continue paying your employees. You can receive a loan in the amount of 2.5 times your monthly average payroll cost in 2019, with no loan payments required for the first six months. Plus, the SBA will forgive the loan if you maintain employees’ normal salaries for eight weeks and use the money for payroll, rent, mortgage interest or utilities.
Express Bridge Loans
If you already have a business relationship with an SBA Express Lender, you can apply for one of these loans to access up to $25,000 quickly. Use the funds to overcome a temporary loss of revenue or bridge the gap while you wait for other relief to kick in.
Do you have an existing SBA 7(a), 504 or micro loan? The agency is covering all payments (principal, interest and fees) on these loans for six months. Bonus: Anyone who applies for and receives one of these loans before September 27, 2020 also qualifies for this relief.
Economic Injury Disaster Loan and Advance
These loan advances of up to $10,000, which do not have to be repaid, initially were available to all small business owners. However, this program has since been restricted solely to U.S. agricultural businesses. Check to see if your business is eligible.
Traditional SBA Loans and Grants
These programs aren’t specific to Coronavirus relief but may still come in handy if you don’t qualify for the other assistance available.
Main Street Lending Program
Under this program, which is not connected to the SBA, the Federal Reserve will purchase up to $600 billion in loans from eligible banks. The goal is to take most of the risk away from banks and encourage them to give money to small businesses more freely.
Most states have established relief programs, too, so be sure to explore what’s available to you locally. The best place to start is the National Governors Association list of governors’ websites. Another good source is Forbes’ updated list of state and local government programs, which also includes assistance available from private and nonprofit companies like Amazon, Goldman Sachs, Google, JPMorgan and others.
Also, don’t forget that the federal government extended the deadline for 2019 individual and business taxes, as well as 2020 first quarter estimated payments, to July 15 to provide additional financial relief. Some states have adopted the same schedule, but make sure to confirm with yours.
Even if you’ve only seen a slight decline in your business income, it pays to check into these relief programs and the traditional loans available to small businesses. You never know what you might be eligible for or when you might need assistance in the future.