There are a variety of federal, state, and local small business loans and grants available for small and micro businesses negatively impacted by the COVID-19 crisis.
We’ve put together a list of links and information about some of the major loan and grant programs, along with an overview of the information you’ll need to apply for these programs.
Please keep in mind that this is not an exhaustive list, and new programs and deadlines are being announced daily.
What you’ll find in this article:
- Small Business Grants – available and upcoming
- Loans – available and upcoming
- Highlight: Comparison of the CARES Act’s EIDL and PPP loans – and what you should do right now.
- Highlight: Measuring the impact of the crisis on your business & tracking data.
1. SMALL BUSINESS GRANTS
Salesforce has announced that California small businesses between 2-50 full-time employees and revenue between $250K-2M can apply for their $10K small business grants starting Monday, April 27th: more information here.
Verizon / LISC’s Small Business Recovery Fund program will be taking applications for relief grants of up to $10K. The third round of applications opens on May 14th: more info here.
The City of San Francisco started providing neighborhood mini-grants from $1-10K to small businesses in underserved communities and women-owned businesses. Check if you’re eligible and apply here, and please note that as of May 12th, we are nearing the application deadlines for some of the neighborhood grants.
If you applied to the City of SF Resiliency Fund $10K grants, note that the program received an overwhelming number of applications and is now closed. If you have already applied but didn’t hear back, you may be contacted if more funding becomes available.
City of SF 0% interest loans up to $50K
Fund limit has been reached for this program. If you have applied already, please note that awards are now in process.
SBA EIDL Disaster Loans
The U.S. Small Business Administration is providing low-interest Economic Injury Disaster Loans (EIDL) for small businesses. As of 4/24, loans should available again very soon for small businesses with fewer than 500 employees. Nonprofits are also eligible to apply.
The EIDL’s major feature is a $10K emergency grant to be paid within a few days that does not have to be repaid. See below “#3. New EIDL And PPP Loans: Comparison & What To Do Now” for more information.
The loans and grants can be used for a variety of purposes, including:
- Providing paid sick leave to employees
- Maintaining payroll to retain employees
- Meeting increased costs to obtain materials due to interrupted supply chains;
- Making rent or mortgage payments; and
- Repaying other obligations.
- Funds can’t be used to pay down existing, long-term debt.
Click here to apply for an EIDL loan directly from the SBA as soon as the program reopens.
CARES Act – Paycheck Protection Program (PPP)
The Paycheck Protection Program (PPP) offers small business loans that are issued by private and community banks. These emergency loans of up to $10M are intended to incentivize small businesses not to lay off workers. The loans can be forgiven when used to maintain payroll through December. Read our detailed article here.
Contact your bank to learn more or visit the SBA’s website for general information and to find a copy of the application form that you will have to provide to your bank/lender, provided they are approved by the SBA. We recommend you talk to your bank first and leverage existing relationships, but many fintech service providers are also administering PPP loans, including Square, Intuit/QuickBooks, PayPal, etc. The PPP loan program will close on 6/30, so make sure to get a PPP loan before that.
CARES Act – Employee Retention Credit (ERC)
If you were not able to receive PPP funds or if you haven’t used them yet, another option to consider is the Employee Retention Credit. In many instances, the ERC will be a good, if not better, choice, but these two options are mutually exclusive: receipt (or usage, this is not clear yet) of a PPP loan can render an employer ineligible to claim the ERC.
The ERC is available to businesses of all sizes, and offers the most flexibility to those with less than 100 employees. The amount of the tax credit can be up to $5,000 per employee, simply reducing tax deposits by the amount of the credit. Even though the cash benefit of the ERC is somewhat deferred (until your quarterly payment is due or you receive a refund, as applicable), using the ERC instead of the PPP will give you a clear idea of the true value of the credit at the outset. If you are considering a PPP loan, especially if you are concerned about your ability to meet the PPP’s maximum forgiveness, you should crunch the numbers and determine whether the ERC is a better option.
Main Street Lending Program
This program is mostly applicable to larger companies with a minimum loan amount of $250K, a relatively low interest rate and no forgiveness. You will find more information from the Federal Reserve, including relevant fact sheets, here.
California IBANK’s Small Business Finance Center Disaster Loans
The SBFC partners with Financial Development Corporations to provide loan guarantees and direct disaster relief loans for small businesses that experience capital access barriers. More info here.
Kiva $15K Disaster Loans
Kiva has increased their maximum funding amount to $15K to help with disaster relief: find more info about the 0% interest loans here.
Non-profit lenders called CDFIs are also here to help. Their grant programs are still available to you, and some are working on new funds to help with COVID-10 relief: make sure to check out their websites for updates or to apply for a loan. Local CDFIs in our direct network are Adelante Fund (MEDA), ICA, Mainstreet Launch, Opportunity Fund, Pacific Community Ventures, and Working Solutions.
California Capital Access Program for Small Business
The CalCAP program encourages banks and other financial institutions to make loans to small businesses with fewer than 500 employees. Click here to see the list of participating lenders.
3. EIDL AND PPP LOANS: COMPARISON & WHAT TO DO NOW
Disaster funding – it’s confusing! Here are the basics. We will keep updating this page as we receive more verified information.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27th. The CARES Act not only gave us the Paycheck Protection Program (PPP) but it also added some provisions to the already existing SBA Economic Injury Disaster Loan (EIDL). Below is a brief overview of the two programs.
In terms of government disaster funding related to the current COVID-19 pandemic, some options go directly through said government entity, i.e. the Small Business Administration (SBA) and some funding is processed through a lender or a bank.
Economic Injury Disaster Loans (EIDL)
Applications for the SBA Economic Injury Disaster Loan (EIDL) have opened in early April and closed after a few days when funds were exhausted; a second round of Federal funding was signed on 4/24 and applications should become live again unless the queue of existing applications is sufficient to exhaust all the additional funding. This is money coming straight from the treasury, there is no intermediary – if/when the program reopens, you will be able to apply directly with the SBA here. EIDL money can be used as working capital to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
Some highlights of the EIDL:
- The SBA can approve and offer EIDL loans based solely on an applicant’s credit score or use an appropriate alternative method for determining applicant’s ability to repay.
- Businesses may qualify for loans up to $2 million. Award is based on the size and type of business.
- The interest rate is 3.75% for small businesses.
- The SBA waived any personal guarantee on advances and loans below $200,000.
- Term: up to 30 years.
- Deferral period: one year.
- Up to $10K emergency grant provision ($1K per employee) added through CARES Act.
- Please note: as of 4/24, the upcoming round of EIDL funding is limited and expected to be exhausted quickly; businesses will likely only be able to apply for and receive the $10K grant provision, and not a larger loan, but there is also a good chance that the queue of existing applications will be sufficient to exhaust all the additional funding – meaning that the application platform may not reopen just yet.
The Paycheck Protection Program (PPP)
The SBA funding through the Paycheck Protection Program (PPP) (part of the CARES Act) is also an SBA loan but this one is administered through a bank or other approved lender (with 100% SBA guarantee). Banks have started processing applications in early April and stopped after a few days as funds were exhausted; a second round of Federal funding was signed on 4/24 and lenders have processing their queues of applications again on 4/27. If you haven’t applied yet, we recommend you get in touch with your bank’s lending officer to apply, as these loans are processed on a first-come first-serve basis and funds are limited. Many online lenders and fintech service providers are also administering PPP loans, including Square, Intuit/QuickBooks, PayPal, etc.
Some highlights of the PPP:
- Loans are given up to a maximum of the lesser of $10 million, or 2.5 times the average monthly payroll costs (including wages for employees making under $100,000, as well as expenses for paid sick leave, healthcare and other benefits ) during the 1-year period before the date on which the loan was made.
- PPP money can be used for payroll, rent, utilities, mortgage interest.
- Interest rate capped at 1%.
- Term: up to 5 years.
- Deferral period: deferred for 6 months after the SBA makes a determination on forgiveness.
- The SBA waived any personal guarantee.
- Some significant loan forgiveness provisions, but at least 60% of forgivable funds need to be used for payroll.
- If you would like more information, our article on PPP and forgiveness is here.
Applying for a PPP loan: what are my different options?
- Your own bank: Leverage existing relationships first. If you have already applied, make sure you are in the queue ready to be processed as soon as funding is available.
- SBA-approved Fintech lenders: Focus on existing partners that know and trust you already, for example some Fintech companies that you may have accounts with: Square, Intuit/Quickbooks, Paypal, etc. An important caveat is that via some platforms, PPP loan amounts may be calculated automatically and won’t allow you to maximize them; some SFMade members have reported auto-calculated amounts being as little as 25% of the amount a bank would help you apply for.
- Other online lenders: We can report that the following lenders have been used by SFMade members: Lendistry, Kabbage, Divvy, Lendio.
- Other banks: We hear that the following banks may still accept PPP applications from non-existing customers: Beneficial State Bank, California Statewide CDC, Central Pacific Bank and City National Bank. You can also check out this PPP lender list put together by Small Business Majority and this crowd-sourced spreadsheet managed by Gusto.
Please note that we aggregated all this information from different sources and can’t vouch for their validity or that it is still relevant.
Receiving PPP loan proceeds: how to maximize forgiveness?
We put together a checklist and FAQs to help you prepare to provide the right information to the SBA with the goal to maximize PPP loan forgiveness. If you received PPP loan proceeds, make sure to read our blog post here and to work on this as early as possible to make it easier when it comes time to submit your documentation.
Some of the rules can be confusing, so feel free to reach out with any questions.
Receiving both EIDL and PPP funding
You can apply for both EIDL and PPP programs but keep in mind that your applications cannot be ‘duplicative of purpose and amounts’ i.e. you cannot double dip. Make sure you are keeping track of what type of funding you are asking for from each government source you apply to and that requests apply to different expenses. You should also keep in mind that if you get approved for a disaster loan you are not obliged to take it so you might as well apply, apply, apply!
If you receive both PPP and EIDL loan advance proceeds, unfortunately, the EIDL loan advance reduces your PPP loan forgiveness by that exact amount. You will basically have to repay the EIDL advance with PPP funds, so don’t forget to take it into account if you were approved for both programs. The EIDL loan advance is the part that functions as a grant, for which you typically get $1,000 per employee and up to $10K.
If you receive both PPP and EIDL (disaster loan) proceeds, make sure to use each set of funds for different purposes. For example, if you hope to maximize PPP forgiveness, you will likely use it mostly for payroll, and will likely use EIDL funds for non-payroll expenses like inventory, accounts payable etc. Detailed and clear accounting practices will be critical to prove the forgiveability of the funds. Please note that the law is not clear as to whether you can use leftover EIDL funds for payroll after you have exhausted PPP funds or after the 8-week period. We recommend you use funds for different expense types for now, and this questions will hopefully be officially clarified soon.
If you have any questions, please email Pierre, SFMade’s Director of Advising and Education.
4. MEASURING THE IMPACT OF COVID-19 ON YOUR BUSINESS
We want to stress the importance of benchmarking your business and tracking data. Why?
First, you will need to gather and keep tracking data (especially payroll and use of funds) if you want part of your PPP loan to be forgiven: in terms of paperwork, we expect it to be relatively easy and fast to access PPP funds, but we also expect the documentation for PPP loan forgiveness to be somewhat burdensome – you need to have processes in place to track and gather the right information. Make sure to read our article dedicated to PPP loan forgiveness here.
Second, we recommend to benchmark your business and to put together a budget — once completed, you will be able to run what-if analyzes: for example, you can take a look at the budget after cutting some of your controllable costs and see how much longer your cash will last. We recommend you read this article put together by Pursuit Lending for a step by step guide and recommendations.
- “#3. New EIDL And PPP Loans: Comparison & What To Do Now” has been adapted from content created by Evergreen Exchange.
- “#4. Measuring the Impact of COVID-19 on Your Business” was inspired by and links to content from Pursuit Lending.
Don’t forget to consult our main COVID-19 resource page for manufacturers.
- Created 4/3.
- Updated 4/6 to add link to the City of SF’s 0% interest loan application.
- Updated 4/8 to clarify PPP loan details.
- Updated 4/14 to include link to upcoming Salesforce grant and update PPP loan details with most recent info.
- Updated 4/24 to include info about LISC’s and SF’s grants, update Salesforce grant info and include EIDL & PPP most recent info.
- Updated 4/29 to add the ERC program and include most recent PPP info and detail how to maximize loan forgiveness.
- Updated 5/12 to edit Verizon/LISC’s grant application date and latest info on receiving both EIDL and PPP.