The current pandemic and resulting preventative measures have had a clear impact on businesses and organizations in our community, including financially. However, there are federal and local programs to help offset some of this impact. Two programs, the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP), were created as part of the Federal stimulus package known as the CARES Act. Locally, the Cayuga Economic Development Agency and the United Way of Cayuga County are providing programs to help businesses and nonprofits as well.
The SBA’s Economic Injury Disaster Loan (EIDL) provides small businesses with working capital loans of up to $2 million that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing. When applying for EIDL, businesses can access a loan advancement up to $10,000. Businesses will not have to repay the loan advancement as there is no obligation to take the loan, if offered. This working capital loan may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. EIDL is not intended to replace lost sales, profits or expansions.
Eligibility for EIDL is based on the size and type of business and its financial resources. The maximum unsecured loan amount is $25,000, while loans over $25,000 will require collateral. Interest rates are 3.75% for small businesses and 2.75% for nonprofit businesses with terms up to 30 years. Loans will be automatically deferred for 12 months. Criteria for approval include acceptable credit history and ability to repay the loan. To apply directly for EIDL and the advancement visit: https://covid19relief.sba.gov/
The Paycheck Protection Program (PPP) is designed to keep employees on the payroll of businesses. Though technically a loan program, the loan will be forgiven if the business keeps all employees on the payroll for eight weeks and spends the money on payroll, rent, mortgage interest or utilities (for full loan forgiveness, 75% of the loan amount must be spent on payroll).
You can apply through banks and financial institutions that are existing SBA 7 (a) eligible lenders or through any federally insured depository institution, credit union, or Farm Credit System institution that is participating. Start with the bank your business typically does business with- if they are not participating in this program, contact CEDA and we can provide you with an up to date list of participating financial institutions in the area. The PPP will be available until June 30th, 2020 but there is a limited amount of money available so you should apply as soon as possible.
If the EIDL and PPP aren’t right for your business, or if there are additional expenses you’d like to cover, CEDA is also offering an Emergency Microloan to Cayuga County businesses. This would be appropriate to help with rent, insurance, utilities, or other regular operating expenses for a couple of months, or to invest in supplies, advertising, or website upgrades needed to adjust your operations to the current situation. Interest and repayment will be deferred for 90 days, with a reevaluation of the deferment as 90 days approaches. The application for this program includes a short form, business financials for 2018 and 2019, and a personal financial statement. If you don’t have financials readily available, please contact CEDA to discuss alternative forms or for templates and instructions to help. For more information about the Emergency Microloan, visit https://cayugaeda.org/covid-19-emergency-microloan-program/.
Certain nonprofits are eligible for EIDL and PPP, but there are also a couple of local grant programs to assist them in this time. The United Way of Cayuga County had established a COVID-19 Grant Fund that will provide grants of $500-$5000 to local nonprofits impacted by the pandemic. The first round of grants will support “front-line community-based nonprofits that have seen increased demand for services due to the coronavirus outbreak”. For more information about this opportunity, visit https://unitedwayofcayugacounty.org/united-way-establishes-covid-19-grant-fund/. You can also donate directly to this fund if you want to help the United Way support even more nonprofits in our community.
Nonprofits can also apply for assistance from the Central New York Community Foundation, which has set up COVID-19 Community Support Funds throughout Central New York. The Cayuga Community Fund and United Way of Cayuga County are helping to coordinate this effort here in Cayuga County. For more information, visit https://cnycf.org/covid19-affiliate.
This is a difficult time for all employers. Each of these programs has different eligibility and application requirements, and not all will be a good fit for every organization. However, these programs and our staff are here to help. Don’t hesitate to reach out to talk through your needs and which programs might work best for your business.