Economic Assistance Opportunities: Due April 3 & 4
Economic Assistance Opportunities
LISC and Verizon are partnering to provide grants of up to $10,000 to businesses and non-profits facing immediate financial pressure because of COVID-19—especially entrepreneurs of color, women-owned businesses and other enterprises in historically underserved communities who don’t have access to flexible, affordable capital. The grant can be used for paying rent and utilities, meeting payroll, paying outstanding debt to vendors, and other immediate operational costs.
The first round of grant applications is due on Saturday, April 4th. I understand this is very short notice. However, the application is short, collecting background information on the organization and its needs. There will be another round.
The US Small Business Administration (SBA) has two time sensitive economic assistance opportunities you can take advantage of:
SBA 7(a) Paycheck Protection Program
Under the CARES Act stimulus bill, nonprofits and small businesses with fewer than 500 employees will be eligible for loans to meet payroll and other qualifying costs. Much of the loan is forgivable if you keep staff on payroll during the loan period (currently March 1 through June 30). This, in essence, turns a portion of the loan into a GOS grant. The total loan fund is expected to be $349B, and loans will be given out on a first-come, first-served basis. Recipients do not have to certify that they are unable to obtain credit elsewhere.
- Loan amount is 2.5 times the organization’s average monthly payroll, with pay capped at $100,000 per employee.
- Up to 8 weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels through June 30.
- Applications will open on Friday, April 3, 2020, through current SBA lenders.
We anticipate high demand for these funds and encourage you to reach out to your bank to determine whether they are an SBA lender and have tailored guidance for their customers and also to begin filling out your application and gathering any supporting documentation. A factsheet that outlines the eligibility requirements as well as the information to gather is available from the U.S. Department of the Treasury.
SBA Economic Injury Disaster Loans
EID loans offering up to $2M in assistance are already available on a first-come, first-served basis to nonprofits to help overcome temporary loss in revenue caused by COVID-19. These loans are similar to other disaster relief loans and do not include loan forgiveness. The application is straightforward and can be completed online now.
- Loans offer up to $2M in assistance
- The interest rate for nonprofits is 2.75%, with repayment terms of up to 30 years. Funds may be used to pay fixed debt, payroll, accounts payable, and other bills that can’t be paid due to the impact of restrictions
- Organizations cannot receive funding from both programs unless the loan applications are for different purposes (i.e. personnel and rent costs for 7(a) and other operating expenses for EIDL).