This article is intended to be accessible and comprehensible. It is not all-encompassing and does not contain all the terms nor all the context. We highly recommend reaching out to your attorney, CPA, or financial advisor to get advice on your unique situation before applying for any relief listed in this article. Additionally, remember that we are not experts in health or policy and make no guarantees as to the accuracy or timeliness of the details on this page. This page is for informational purposes only. See our full COVID-19 disclaimer for more.

If your business has hit trouble because of the pandemic and you need guidance, the attorneys at G & G Law have assembled a toolkit of accessible, easy-to-digest information that answers many common questions we’ve received from our clients. You can read more about it and purchase it here.

Last updated on April 23rd, 2020

 

 

The CARES Act

Find the full text of the law online here.

 

Paycheck Protection Program:

  • Eligibility (Sec. 1102)
    • Businesses/non-profits with fewer than 500 employees are the main target
    • Self-employed individuals, independent contractors, and sole proprietors may be eligible with satisfactory evidentiary documentation
  • Assistance (Sec. 1102)
    • The minimum loan amount will be $10M or the result of the following formula, whichever is lesser:
      • (2.5 x AA) + bb
      • For non-seasonal employers:
        • AA = Average monthly payroll costs for previous year (calculated in the period between February 15th, 2019 and June 20th, 2019; employers can elect for the period to begin March 1st, 2019)
        • bb = Any outstanding amount of certain SBA loans (those under “BUSINESS LOANS PROGRAM ACCOUNT”)
      • For seasonal employers:
        • AA = Average monthly payroll costs (calculated in the period between January 1st, 2020 and February 29th, 2020)
        • bb = Any outstanding amount of certain SBA loans (those under “BUSINESS LOANS PROGRAM ACCOUNT”)
      • Loans can be used for:
        • Payroll costs for employees making up to $100K and living in the US
        • Continuation of healthcare benefits
        • Employee salaries, etc.
        • Mortgage interest
        • Rent
        • Utilities
        • Interest on previous loans
  • Loan Forgiveness (Sec. 1106)
    • Available for the sum of payroll, mortgage interest, rent, and utilities during the covered period (the eight weeks following the origination of the loan)
    • Can’t exceed the principal of the loan
    • Reductions:
      • (Average number of employees during the covered period) divided by (average number of employees between February 15th, 2019 and June 30th, 2019)
        • Non-seasonal employers can choose January 1st, 2020 to February 29th, 2020 for the latter period
      • Reduced by any salary or wage cuts of more than 25% of the total, measured against the most recent full quarter preceding the covered period
      • Neither of the reductions will apply if the staff and wage cuts occurred between February 15th, 2020 to April 26th, 2020 and are reversed by June 30th, 2020 (i.e. employees are hired back and wages are restored)
    • You must provide extensive documentation to receive forgiveness.
  • Conditions
    • 4% interest or less
    • No personal guarantee required
    • No collateral required
  • To Prepare
    • Collect records for covered expenses
    • Determine if you plan to reverse (i.e. rehire) any reduction in workforce
    • Collect standard documentation for a loan application, such as:
      • Income statements and balance sheets for 2019 and 2020
      • The last three years of federal tax returns
      • Payroll information for 2019
      • Organizational documents (i.e. operating agreements, bylaws, etc.)
      • General liability insurance information
      • Lease and amendments
  • Application
    • Fill out the application, available here.
    • Be sure to talk with your banker FIRST.
    • Apply with an eligible lender, such as:
      • All existing SBA-certified lenders
      • FDIC-insured banks and credit unions
      • Farm Credit Systems institutions
      • Other lenders, to be authorized after they apply and are approved

 

Emergency EIDL Grants (Sec. 1110)

  • Provides additional funding for the SBA disaster loans (see below), which you will not have to repay

 

Relief for Workers Affected by Coronavirus Act (Sec. 2101)

  • Increases payments by $600/week for up to four months
  • Extends unemployment benefits to self-employed workers, independent contractors, and those with limited work history
  • Covered individuals must be able to demonstrate that their hardship is a result of COVID-19

 

SBA Disaster Assistance (EIDL) Loans

Find full details online here.

  • Eligibility
    • A Small Business is defined as:
      • TRADITIONAL MEASURES:
        • Manufacturing companies with 500 employees or fewer
        • Wholesale companies with 100 employees or fewer
        • Retail or Service companies with average annual receipts under $7M
      • ALTERNATE MEASURE:
        • Maximum tangible net worth is $15M or less; AND
        • Average net income is $5M or less (after Federal income taxes)
      • Find out if your business meets the SBA’s definition here
    • Eligible businesses include:
      • Businesses directly affected by the coronavirus
      • Businesses that offer services directly related to affected businesses
      • Other businesses indirectly related to industries which will suffer from disaster-related losses in their community
    • Your business must have a physical presence in a declared disaster area that is tangible and significant (Illinois has been declared a disaster area)
  • Assistance
    • Provides loans of up to $2M
    • Allowed Uses:
      • Operating expenses incurred because of the disaster, such as
        • Payroll
        • Sick leave
        • Rent or mortgage
        • Expenses from disrupted supply chains
        • Fixed debt payments
        • Accounts payable and bills that cannot be paid because of the disaster
      • NOT a replacement lost sales or profits
  • Conditions
    • Collateral required for loans over $25K
      • The SBA prefers real estate
      • If collateral is not available, the SBA requires a pledge of what the borrower does have
    • 3.75% interest for small businesses
    • 2.75% interest for nonprofits
    • Repayment period of up to 30 years
    • Deferred payments of one year
  • Approval Criteria
    • Business eligibility (see above)
    • Acceptable credit history
      • There is no required score, but the SBA will check. If your score is low, prepare an explanation in case they inquire
    • Repayment capacity
      • Demonstrated through SBA Form 1368 (Monthly Sales Figures)
  • Application
    • Make sure you have collected and reviewed all the required information before you start your application. This is the primary reason for processing delays.
    • The Women’s Business Development Center published phenomenal resources to help you prepare:
    • When you’re ready (not before!) you can apply online here.
    • *Funds may be limited and first come first serve, so apply fast!

 

Verizon Small Business Recovery Fund

In cooperation with the Local Initiatives Support Corporation, Verizon has donated $2.5M to provide one-time grants to small businesses. Read more here.

 

  • Eligibility
    • Must demonstrate immediate financial need because of the coronavirus
    • Exact criteria/rubric unclear
    • Businesses owned by women, people of color, or serving historically underserved communities are especially encouraged to apply
  • Assistance
    • Grants up to $10K
    • Allowed Uses:
      • Rent and utilities
      • Payroll
      • Paying outstanding debt to vendors
      • Immediate operational costs
  • Conditions
    • No repayment necessary
  • Application
    • Must provide Federal ID/Tax Identification Number, such as:
      • Federal IRS Determination Letter for Nonprofits
      • IRS EIN Confirmations for Businesses
      • Current Schedule C for Sole Proprietors and ITIN
    • Apply online here
    • Applications are due by April 4th, 11:59 PM ET (10:59 PM CT).

Spread the word: Verizon will donate an additional $10, up to $5M total, for every use of their hashtag #PayItForwardLIVE. Use it when you support your favorite small business!

You can watch their #PayItForwardLIVE livestream at 8 PM ET/7 PM CT on @Verizon’s Twitter, Yahoo, Twitch, and Fios Channel 501.

 

Facebook Small Business Grants

Facebook is offering $100M in grants and ad credits to small businesses impacted by COVID-19. You can read more here.

 

  • Eligibility
    • Must be a for-profit business hurt by COVID-19
    • Must have been in business for at least a year
    • Must have between 2-50 employees (may include the owner)
    • Must be in an area where Facebook operates (see eligible areas here)
    • Support will emphasize woman- and minority-owned businesses
  • Assistance
    • NOT awarded on a first-come, first-serve basis
    • $4K total aid: $2.5K in cash and $1.5K in Facebook ad credits
    • Allowed Uses:
      • Rent and utilities
      • Payroll
      • Paying outstanding debt to vendors
      • Immediate operational costs
  • Conditions
    • No repayment necessary
  • Application
    • Must provide the following:
      • Federal Employer Identification Number (FEIN)
      • Partnership documents
      • Business license
      • Proof of incorporation
      • Official registration
    • You also be asked (or have the opportunity!) to tell your business’s story and how you would use the grant to make an impact in your community
    • You have two weeks to apply after applications become available in your area. Applications are available in Chicago.
    • Apply online here.

 

Accion Loan Services

Find full details online here.

 

Reduced Monthly Payments

  • Eligibility
    • For all existing clients in Illinois and Indiana
  • Assistance
    • 90% reduction for the next three months, plus a three-month extension beyond the original maturity date
  • Application
    • You can apply here

 

Expedited Line of Credit Application

  • Eligibility
    • For existing clients and entrepreneurs needing immediate capital
  • Assistance
    • Provides loans up to $25K, with the amount based on January’s and February’s monthly revenues
    • Can request extra capital
  • Conditions
    • A clean credit report in 2019
  • Application
    • You can apply here

 

Chicago Small Business Resiliency Loan Fund

Find full details online here.

  • Eligibility
    • Fewer than 50 employees
    • Less than $3M in gross revenue in 2019
    • Revenue decreased by more than 25% due to COVID-19
    • No outstanding tax liens or legal judgments
  • Assistance
    • Provides loans up to $50K, with the principal based on three months’ average monthly revenues before pre-outbreak
    • Allowed Uses
      • Must be used for working capital
      • 50%+ applied towards payroll and a commitment to keep at least half of your pre-outbreak workforce
  • Conditions
    • Interest: 1% for the first 18 months, then 5.75%
    • Terms of up to 5 years
      • Months 1-6: $10 monthly towards principal. Interest accrues but is not payable.
      • Months 7-12: Monthly payments towards interest only.
      • Months 13+: Monthly payments towards interest and principal
  • Application
    • Be prepared to provide the following:
      • A valid business address in the City of Chicago
      • A valid City business license (if applicable)
      • Business bank statements from October 2019 to February 2019
      • Your most recently filed tax return
      • A photo ID for the loan applicant business owner
      • The applicant business owner will be required to provide a personal guarantee and undergo to a credit check and City of Chicago debt check
      • *If two or more owners have equal stake in the business, then each owner with that share is subject to the checks and personal guarantee
      • *If the applicant or business has existing City debt, there is an opportunity for a payment plan
    • Apply online here (accepted starting March 31st)
    • *Funds may be limited and first come first serve, so apply fast!

 

Hospitality Emergency Grant Program

Find full details online here. Accion also provided a summary (available here)

  • Eligibility
    • Bars and restaurants
      • Must have less than $1M in 2019 revenue
      • Must have a valid license to serve food or liquor
    • Hotels
      • Must have less than $8M in 2019 revenue
      • Must have a valid license
  • Assistance
    • Bars and restaurants
      • Eligible entities with less than $500K in 2019 revenue may receive up to $10K
      • Eligible entities with $500K – $1M in 2019 revenue may receive up to $25K
      • Allowed uses:
        • Working capital (e.g. rent, payroll, accounts payable, etc.)
        • Job training (e.g. new practices/policies regarding delivery, sanitation, etc.)
        • Technology enabling new operations and associated implementation costs
      • Hotels
        • Eligible entities may receive up to $50K
        • Allowed uses:
          • Working capital to support employee retention
  • Application
    • Applications are available until 5:00 PM on April 1st
    • Recipients are selected through a lottery, not first come first serve or another rubric
    • Selected businesses will be notified on April 4th
    • Apply online here (Spanish application)

 

Illinois Small Business Emergency Loan Program

Find full details online here.

  • Eligibility
    • Business must be located outside of the City of Chicago
    • Must have fewer than 50 employees, based on the average from October 2019 to December 2019 (seasonal businesses may elect to measure from January 2019 to December 2019).
    • Must have less than $3M in 2019 revenue
    • At least a 25% decrease in revenue as a result of COVID-19
    • Non-profits and farm businesses traditionally eligible for the USDA’s farm loan program are not eligible
  • Assistance
    • Loans of up to $50K, with the amount determined by average revenue in the months leading up to the pandemic
    • Allowed Uses:
      • Working capital
      • 50% of loan proceeds must be applied towards payroll or other eligible compensation (e.g. salaries, wages, tips, paid leave, group benefits)
      • Compensation over $10K is excluded
  • Conditions
    • Interest: 3% annual interest
    • 5-year term
      • 0 – 6 months: No payments due
      • 6 months – 5 years: Fixed payments
  • Application
    • Must commit to hire or retain at least 50% of your workforce for 6 months
    • Mus provide proof of Illinois business address and valid business license from an Illinois jurisdiction
    • Must provide bank statements dating back to October 2019
    • Must provide most recent tax returns
    • Applications available here (starting April 1st, 5:00 PM)