COVID 19 Business Financial Support Initiatives
Prepared for the Southold Town Economic Development Committee – 3/31/20
General Government Support for Businesses
There are a number of different ways Government is trying to help small businesses to survive the sudden contraction of the economy due to the COVID 19 Pandemic. Below are some web sites and other resources which will supplement this memo.
1. Suffolk County Business Recovery Unit serves as a One Stop for Business questions and resources and is also collecting data on economic and workforce impacts. The County has established a site which contains all the operational restrictions/closings which impact County businesses as well as descriptions of financial support programs as they come online.
You can receive updates by texting COVIDSUFFOLK to “67283”.
Please take a moment to complete this survey which will help the County get a better handle on local needs.
2. NYS Small Business Development Centers (SBDC). This program is funded by SBA and organized by New York State. The SBDC’s will assist businesses in applying for SBA Economic Injury Disaster Loans (EIDL). Please see attached for a detailed presentation on how to complete the automated application process. The nearest SBDC is operated out of Stonybrook University. http://www.nyssbdc.org/CoronaSBupdates.html
4. Contact your bank or accountant for help. It is a very good idea to be in touch with your bank and your accountant. For some of the loans you will work with a bank. For the EIDL loans (see below) you apply on line and the SBA is the lender. There are a number of tax relief and deferral opportunities; talk to your accountant for a better understanding of these.
Programs for Companies and Non-Profits with Employees:
SBA Economic Injury Disaster Loans (EIDL):
This program is for businesses and non-profits (less than 500 employees) which have been unable to get credit elsewhere, (agricultural businesses not eligible). You must be able to document business losses due to COVID-19; funds can be used for working capital, paying fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred. Entities may qualify for loans up to $2 million. Interest rates are 3.75% for small business; 2.75% for private nonprofits. The maximum unsecured amount of loan is $200,000 with terms up to 30 years. See attachment below for coaching through the application process: https://covid19relief.sba.gov/#/
SBA Economic Injury Disaster Advance Loan: (EIDAL):
Up to $10,000 loan advance to small businesses. Funds will be made available within three days of a successful application. The purpose of the loan advance is to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. According to the SBA web site this loan advance will not have to be repaid. For mor information, go to https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-3 ; there is a direct link to the application on this site.
CARES ACT, Paycheck Protection Program:
Loans up to $10 million for payroll support, paid sick leave, insurance premiums, and mortgage, rent and utility payments. Eligible expenses incurred within the 8 week period after receiving the loan may be converted to a grant under certain conditions. Eligibility includes small business, nonprofits with up to 500 employees, sole-proprietors, and other self-employed individuals. Will be made available by local and national lenders.
For Non-profits: Briefing on Emergency Coronavirus Funding for 501(c)(3) Nonprofits, US Chamber of Commerce Foundation: https://www.youtube.com/watch?v=IZqDIKBc3G0; The CARES Act – Implications for Eligible Nonprofit Organizations: https://www.stroock.com/publication/the-cares-act-implications-for-eligible-nonprofit-organizations/#_ftn2
DOL Shared Work Program:
The Shared Work Program can provide an alternative to laying off employees during business downturns by allowing workers to work a reduced work schedule and collect partial unemployment insurance benefits for up to 26 weeks. Instead of cutting staff, you are able to reduce the number of hours of all employees or just a certain group. See Shared Work Program fact sheet:
All Businesses, Tax Provisions:
- Refundable payroll tax credit for 50% of wages paid by employers to employees.
- For eligible employers with 100 or fewer F/T employees, all employee wages qualify for the credit.
- Delay in payment of employer share of FICA
- Deferral of many tax payments due in the next 90 days; deferral of filing tax returns until July 15.
Local Support to Generate Current Cash Flow:
There are several approaches to generating cash flow now and deliver services/products later.
- Kabbage has launched an online hub to help boost sales for small businesses, including a system through which businesses can sell gift cards to consumers for use at a later date. https://www.kabbage.com/helpsmallbusiness
- Dining Bonds are similar: For restaurants: issue gift card (75Cents on the dollar) which are bought now and spent later. Restaurants need to sign up: https://diningbond.com/
- Grants: Also check out Yelp and Facebook.
For those who own a restaurant or were employed by one:
- Food and Beverage Industry Relief Fund operated by
Southern Smoke – Emergency Relief Program (for restaurants & restaurant workers). Main emphasis is assisting those with medical challenges.
- James Beard Foundation Food and Beverage Industry Relief Fund
- Main Vest, a crowd funding platform, announced its new Main Street Initiative: a $2,000, zero interest 120 day loan for restaurants or other brick and mortars affected by the shutdown.