COVID-19 Cash Management / Financing Programs for Small Businesses

COVID-19 Cash Management / Financing Programs for Small Businesses

We hope that you, your family, and staff are doing well and staying healthy. As fellow business owners, the partners of the NYBB Group understand the challenges that you are facing.

We know that you are concerned about having enough cash flow, liquidity, and access to financing to survive these difficult times. With that in mind, we are doing our best to keep-up-to date with all the resources available to business owners impacted by the COVID-19 Pandemic.

Our plan is to share some of this worthwhile information with you over the coming weeks, so that you can make informed decisions.

Our firm is available, accessible and working remotely. Please do not hesitate to contact us to discuss the ideas shared below or if you have any questions regarding the valuation of your business or real estate, and/or your exit-planning options.

CASH MANAGEMENT PROGRAMS

In this newsletter, we would like to familiarize you with the following governmental programs that may help alleviate some of your liquidity challenges:

 

  • SBA Paycheck Protection Program
  • SBA Economic Injury Disaster Loans (EIDL)
  • NYC Small Business Continuity Fund
  • NYC Employee Retention Grant Program
 

Two of the options listed above are NYC programs that apply to businesses in NYC only.  If additional programs are passed in other counties or at the State level, we will forward this information to you as it becomes available.


FINANCING PROGRAMS FOR SMALL BUSINESSES

1)  SBA Paycheck Protection Program

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020.  The Act is a package of measures introduced at the federal level to respond to the Covid-19 Pandemic.  For businesses, one of the more relevant sections of the Act is the Paycheck Protection Program or PPP.   Among other things, the PPP allocates $350 billion in government-backed loans from private banks to help small businesses keep workers employed amid the pandemic and economic downturn.  In some cases, the loans can be converted to grants, meaning that the loan does not need to be paid back if you meet the requirements.  Loans can be up to 250% of the borrower’s average monthly payroll costs, not to exceed $10 million.

According to current guidance, you are eligible if you meet the following criteria:

  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SBA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An individual who operates as a sole proprietor
  • An individual who operates as an independent contractor
  • An individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organization that meets the SBA size standard

Note: The preceding information is provided for informational purposes only.  Please consult the SBA directly for the actual rules of the program.
For More Details Visit:
https://www.sba.gov/funding-programs/loans/paycheck-protection-program.

2)  SBA Economic Injury Disaster Loans (EIDL)

The CARES Act also expanded the EIDL program administered by the SBA.  The Act extends EIDL loans to a broader range of small businesses and simplifies the application process for such loans.  The loans may be used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the impact of the pandemic.

The expanded program provides for the following, among other things:   ·

  • Up to $2 million in loans.
  • Loan interest rate of 3.75% for small businesses without credit available elsewhere, and 2.75% for non-profits.
  • Maximum term of up to 30 years, depending on the ability to repay.
  • A $10,000 cash advance that may not need to be paid back under certain circumstances.

For Program Details, Visit:

https://www.sba.gov/page/disaster-loan-applications#section-header-0 

You should also visit the SBA’s Coronavirus (COVID-19): Small Business Guidance & Loan Resources page:

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources    

3)  NYC Small Business Continuity Fund   

To help small businesses deal with the impact of COVID-19, the City of New York has launched the NYC Small Business Continuity Loan Fund to companies as they face decreased revenue.   NYC businesses with fewer than 100 employees impacted by COVID-19 and experiencing a decrease in sales of 25% or more will be eligible for interest-free loans of up to $75,000 to help retain employees and ensure business continuity. The loan can be used for a variety of purposes, including working capital, inventory, or other investments.   To be eligible, businesses must demonstrate the ability to repay the loan and have no outstanding tax liens or legal judgments. While the program is not yet live, New York City has asked that you complete the pre-application checklist to review your eligibility for this fund.

Submit your request here:

https://www.surveymonkey.com/r/ZL5N8XL 

You can also e-mail: Covid19biz@sbs.nyc.gov 

 

4)  NYC Employee Retention Grant Program

This program helps small businesses and nonprofits in New York City retain employees as they face decreased revenue from the impact of COVID-19. Eligible applicants will receive a grant covering up to 40% of their payroll for two months; up to $27,000.

Applicants must meet the following criteria to apply:

  • Must be located within the five boroughs of New York City.
  • Have 1 – 4 employees in total.
  • Demonstrate at least a 25% decrease in revenue as a result of COVID-19.
  • Must have been in operation for at least 6 months.
  • Have no outstanding tax liens or legal judgments.

To apply go to the NYC program website.  Be prepared to upload several supporting financial documents for 2019 and 2020 to demonstrate the adverse revenue impact, and two months of payroll records to calculate the grant amount.

Click here for the checklist for specific requirements.

Please check with your local SBDC office or Score.org for up to date information.

https://americassbdc.org/

https://www.score.org/

Thank you again for the opportunity to serve you. All members of our firm are available and ready to help.  Please do not hesitate to contact us to discuss the ideas shared above. Should you require additional guidance please email karen@nybbinc.com and we will have someone follow up with more information as it pertains to your business.

Stay tuned as we will be following up with additional information on how to reduce your costs and sustain your profitability in these challenging times.

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