Top 7 Coronavirus Small Business Loan Programs

Business location closed due to the covid pandemic.

Today governmental shelter-in-place directives and individual self-quarantine actions are stifling business activity throughout Texas. While temporary, the impact of these measures is especially devastating to businesses dependent on a stable monthly revenue.  Many are unable to meet payroll or make this month’s rent.  Businesses are resorting to laying off employees and not paying their bills. These are not your only options.  There are a number of options to consider that may help.

The Treasury Department and the Small Business Association

First, you can obtain working capital through various public and private programs recently made available.  The Treasury Department and the Small Business Association (the “SBA”) have several programs designed to help.  One such program, the Payroll Protection Program (the “PPP”) provides small businesses with funds for payroll, rent, and other operating expenses. The PPP allows you to borrow up to 250% of your average monthly payroll.  This amount may be used to pay salaries, rent, or utilities. Importantly, if you keep your employees during this crisis and use the borrowed funds on approved expenses the entire amount will be forgiven.

Economic Injury Disaster Loan Program

The SBA also offers low interest, long-term loans of up to $2 million specifically for working capital under its Economic Injury Disaster Loan Program. These loans are available in Texas to small businesses suffering because of COVID-19.  The most interesting feature here is that you may apply for a $10,000 advance on the loan.  You will receive the advance within three days of applying and the advance does not have to be repaid.

Small Business Debt Relief Program

If you already have a non-disaster SBA loan the Small Business Debt Relief Program may help. Under this program, the SBA will cover all payments related to your SBA loan, including principle, interest, and fees, for six months.  If you do not already have an SBA loan, you can obtain a new SBA loan within the next six months and the program will apply.

AssistHer Emergency Relief Grant offered by Texas Women’s University

There are other Texas-specific programs that may help your business. One such example is the AssistHer Emergency Relief Grant offered by Texas Women’s University. The AssistHer grant provides $10,000 to women-owned businesses in Texas. Funds granted under this program can be used for operating expenses or for expenses related to adapting your business to this new environment.

Policy and Contract Terms

Second, you can examine your contracts to see if their terms can provide you relief.  Contracts govern your business relationships and often dictate the extent of your expenses.  For instance, a lease may set the amount of monthly rent you are required to pay, or a supplier contract may require that you purchase a set amount of raw materials. Often, these contracts will allow for relief in the face of unusual and onerous conditions. Even if there is no specific provision providing relief, an understanding of the contract’s terms will help you negotiate for relief. Today everyone is under pressure – the other party may be willing to reduce or delay payments rather than loose the contract all together.

Business Interruption Insurance

Third, if you have business interruption insurance you should review your policy. While many policies require physical damage to your property before they are tripped, others do not. A thorough review of your policy could lead to a source of income that will help you weather this storm.

Texas Regulations for Covid-19

Fourth, you can adapt your business to take advantage of relaxed regulations. The federal government and Texas have made several concessions due to the COVID-19 pandemic. One well-publicized example applies to the sale of alcohol. Now certain establishments may sell alcohol along with to-go food orders.  Another important relaxation relates to your business taxes. The deadline for filing both federal income and Texas franchise taxes has been delayed to July 15th.

Hammerle Finley Law Firm Can Help Your Business Survive

As you can see, there are a number of great options available to help your business survive.  To take advantage of these options, however, you will need to be proactive and aggressive.  The public and private programs have many differing applicability and use requirements. Your policies and contracts will require close scrutiny. Taking advantage of the new regulatory environment will require you to be imaginative.  Please reach out to the Hammerle Finley Law Firm. We can help you navigate your options and work towards surviving this pandemic.