COVID-19 has, directly or indirectly, struck many aspects of lives, especially small businesses. Fortunately, the government has developed many relief schemes for small businesses to manage the ongoing crisis.
Let’s discuss thoroughly what these relief schemes are:
Paycheck Protection Program (PPP)
Small Business Administration(SBA) regulates the PPP program. It is the most widely known relief program which helps small businesses to supply salaries to their employees.
Many people shut their businesses and sent their employees back because of salary crises, but this loan turned out to be a lifesaver. Small businesses with 500 employees are eligible for this loan even if it is their second loan.
Technically it’s a loan, but borrowers can have the amount written off if they apply for forgiveness within ten months of the last period of your agreement.
You can find out more about this scheme, whether who can qualify, eligible lenders, and much more on the official website.
Economic Injury Disaster Loan (EIDL)
The Small Business Administration also regulates EIDL loans. It mainly covers the temporary loss of revenue by small businesses and non-profit organizations, which occurred due to the pandemic.
The primary difference between PPP and EIDL is that the latter is not forgivable. Thus, any firm can apply for both schemes but different purposes.
These loans can help small businesses meet financial commitments and cover operating expenses. The interest rate is 3.75% for small companies and 2.75% for non-profits.
Shuttered Venue Operators Grant (SWOG)
The American Rescue operates this grant Plan Act. It provides grants to businesses that remained closed during pandemics. The total budget is $16 billion, out of which $2billion is allocated to small businesses with 50 employees or less.
Entities eligible for SWOG are:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organizations operators
- Relevant museum operators, zoos, and aquariums
- Motion picture theatre operators
- Talent representatives
Restaurant Revitalization Fund (RRF)
The American Rescue Plan Act for food and drink establishments established RRF at the budget of $26.5 billion. It will set aside $5 billion of its funds for smaller businesses with gross revenues of less than $500,000.
According to American Rescue Plan Act, qualifiers are:
These funds will be given in phases. The hierarchy of allotment will be set as businesses that lost more enormous revenues will be entertained first. RRF will give more preference to small businesses run by women, veterans, and economically weaker sections.
SBA debt relief
In this scheme, the SBA aims to pay principal, interest, and any fees associated with loans owned by borrowers for such loans that are in ” regular servicing status.”
It’s eligible for these types of SBA loans
To check your eligibility terms and conditions, check the SBA debt relief website.
So many relief funds, loans, and grants have emerged as a savior for small, micro, and solo businesses. It will help if you visit a trusted bank and ask whether your business qualifies for particular relief or not. So many owners don’t even know these options exist; significantly smaller businesses run locally are less informed.
You must arm yourself with the knowledge so that you minimize your loss. These schemes are regularly changing, so keep yourself updated.