Thank you to Andrew Goczkowski at Congresswoman Schakowsky’s office for sharing this summary of Federal Aid with our office:
Small Business Owner Guide to the CARES Act (from the U.S. Senate Committee on Small Business & Entrepreneurship) continues to be a great resource for small businesses & non-profits looking for assistance during this period. This guide has frequently asked questions for each of the programs established or enhanced to support small businesses, and many of its key points are briefly summarized in the guidance below.
Feedback on your Disaster Recovery. Share your organization’s experience navigating the federal resources created to support these organizations during this time of need.
The Paycheck Protection Program and Health Care Enhancement Act was passed by Congress and signed into law on 4/24. This package included:
General Information: The PPP is designed to help small businesses & non-profits maintain payroll in light of the COVID-19 pandemic. Eligible businesses who enroll in the program will receive a forgivable loan to use for payroll purposes, in addition to helping pay for utilities, rent, mortgage interest payments, and more. Details are included in the links below.
Illinois Numbers So Far: According to the SBA, as of April 16, 69,893 loans had been approved for Illinois, totaling $15.972 billion. The average loan amount was $228,529.
Application Information: PPP applications are to be submitted through participating lenders. (See the PPP Lender Find Tool below)
If you have already submitted your application with a lender, I suggest that you contact that lender ASAP to ensure that they have the documentation they need to process your application as soon as possible.
If you have applied for a PPP loan but have found your lender non-responsive, you may want to consider other avenues to ensure that your application has a great likelihood of being processed and accepted. According my contacts at the SBA, it is not uncommon for organizations to have multiple simultaneous PPP applications filed with different lenders. While I do not have anything in writing, it is my understanding that these simultaneous applications will not harm your attempt to receive PPP funding. Importantly, I want to reiterate that your organization may only receive one PPP loan.
Lenders Accepting New Customers: If you have not yet located a lender willing to take your application, our office has been informed about several lenders that are accepting applications from new customers. These include:
These are lenders that small businesses have indicated are or were receiving applications from new customers, but to be clear: this isn’t an endorsement of any of them. I encourage you to do your due diligence before entering into a relationship with any lender.
PPP Loan Resources: The Small Business Administration has distributed additional guidance from the U.S. Department of the Treasury on how the Paycheck Protection Program is going to be implemented and what both lenders and borrowers need to know. The following documents were provided:
General Information: The SBA’s Economic Injury Disaster Loan (EIDL) program received significant additional funding in the recent bill signed into law on 4/24. These SBA loans provide small businesses with a long-term, low interest loan to help them survive the COVID-19 crisis.
Note that these are loans, not grants like the PPP may turn into. Applicants can apply for both EIDL and PPP loans simultaneously, although the funds cannot be used for the same purpose.
Illinois Numbers So Far: According to the SBA, as of April 24, 38,984 EIDL program loans have been processed nationally, amounting to almost $8 billion. This includes 1,243 loans for Illinois organizations, amounting to about $256 million. Note that there is significant demand for this program, and it is my understanding that there may be millions of applications being processed.
Application Process: The SBA has established a streamlined application process that is available here. Important: if your eligible business or non-profit needs short term assistance, and you applied prior to March 29, you must re-submit your application to request the EEIG cash advance.
If you have already applied for funds through EIDL and do not need the loan advance (discussed below), your application should continue to be processed without additional steps.
Application Status: You may check on the status of your application by calling 800-659-2955.
General Information: Businesses that need an infusion of capital in the short term and are applying for a loan through the EIDL program also have the opportunity to apply for an Emergency Economic Injury Grant. The purpose of the EEIG program is to receive an advance of up to $10,000 from the requested EIDL amount, and to receive this amount quickly while the EIDL application is being processed. This process can be started from the EIDL application, available here. This program’s original $10 billion appropriation was recently doubled to $20 billion.
Illinois Numbers So Far: According to the SBA, as of April 24, 1,192,519 EEIG advances had been processed, totaling about $4.8 billion. Of these, 42,381 Illinois organizations had received the advance amounting to about $176 million.
The SBA has announced the availability of a new SBA Express Bridge Loan program, that is available to small businesses who already have an established relationship with a SBA Express Lender.
General Information: SBA Express Bridge loans are being offered to act as a bridge for businesses who need short term funding in order to stay afloat until they receive EIDL funds they have previously applied for. These funds are available in amounts of up to $25,000 and have a fast turnaround time. These loans will be repaid in full or in part by proceeds from the EIDL loan once the process is completed.
The Small Business Administration is providing a program to assist small businesses who have non-disaster SBA loans – namely 7(a) loans, 504 loans, and microloans.
Program Benefits: The SBA will cover payments (on principal and interest) in addition to fees for six months.
Program Applicability: This program will apply to preexisting loans in these categories, in addition to new borrowers who take out these loans within six months of the CARES Act becoming law.
Loan Program Details: Please see the below links if you think that your business could benefit from these options:
General Information: The CARES Act includes a Employee Retention Tax Credit, designed to encourage employers to retain their employees during the COVID-19 crisis. The IRS describes the credit as a “fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This applies to wages paid between March 12, 2020 and January 1, 2021, with a maximum credit for any employee amounting to $5,000. Additional IRS guidance is available here.
Key Caveat: This credit is not available to employers receiving assistance via the Paycheck Protection Program.
General Information: According to the Guide, a provision in the CARES Act allows for the deferral of the employer portion of certain payroll taxes through the end of 2020. These deferred amounts are due in two installments – one at the end of 2021, the other at the end of 2022. Included deferrable taxes include the employer portion of FICA taxes and half of SECA tax liability. Additional IRS guidance is available here.
Key Caveat: Deferral is not available to employers receiving assistance via the Paycheck Protection Program.
General Information: In addition to direct financial assistance to small businesses and non-profits, the recent stimulus packages have included significant funding for enhanced small business counseling services. These organizations are well versed in how to help small businesses succeed and stand ready and willing to help your organization navigate these difficult times. Counseling resources include:
Small Business Resiliency Fund – The City of Chicago recognizes that COVID-19 has put a difficult burden on our business and non-profit community. As a response to this challenge, the City of Chicago has established the $100 million Chicago Small Business Resiliency Fund (the Resiliency Fund), which will provide small businesses and non-profits with emergency cash flow during this health crisis. Funds will be provided to eligible businesses as low-interest loans.
Illinois Small Business Emergency Loan Fund
Department of Commerce and Economic Opportunity (DCEO) and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000.
Businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 will be eligible to apply. Successful applicants will owe nothing for six months and will then begin making fixed payments at a below market interest rate for the remainder of a five-year loan term.
Learn more about eligibility and how to apply here.
The Business Invest – Illinois Small Business COVID-19 Relief Program (“Program”) is an impact investment loan program under which the State Treasurer has made up to $250 million in deposits available to financial institutions throughout the state, at near-zero rates, to assist Illinois small business and non-profits negatively affected by the COVID-19 pandemic. The purpose of this funding is to provide vital economic support to small businesses and non-profits throughout Illinois to help overcome the loss of revenue they are experiencing.
Through this program, the Treasurer’s Office partners with approved financial institutions to provide loans — either lower rate loans, or loans to a business or non-profit that would not otherwise qualify — to Illinois small businesses impacted by the COVID-19 pandemic.
Rapid relief loans for small businesses, gig workers and independent contractors.
Cook County’s Bureau of Economic Development has launched The Community Recovery Fund as part of the Community Recovery Initiative. This loan fund offers one-time, zero-interest loans of up to $20,000 for small businesses and $10,000 for independent contractors in suburban Cook County. Loans will be administered by the Chicago Community Loan Fund and provided by a network of community lenders. Applications open in mid-April on a first-come, first-serve basis.
To apply, businesses and independent contractors in suburban Cook County must meet these requirements:
To learn more about the initiative and sign up for updates for when the application period opens, please complete this form. Updates will be sent on a regular basis.
To help businesses understand the different support programs being offered, Cook County and our partners are providing a wide variety of technical assistance. The goal is to keep Cook County businesses informed of the most up to date information about federal, state and local programs. Direct assistance will be available soon.