COVID-19 Economic Assistance
Assistance For Small Businesses
There are a number of disaster assistance programs available to support businesses through the COVID-19 crisis. Despite best intentions, these programs will not make your business whole for the losses that you will incur. Additionally, despite terms like “emergency grant” and “loan forgiveness”, it is important to remember that the majority of assistance you receive will likely have to be paid back at some point. Obviously, emergency funding is paramount, but so too is solid financial planning. The first step in seeking assistance should be a hard examination of your own business finances in order to determine what you absolutely need to get through this crisis, as well as what the longer term impacts and changes will be to your business.
For information on the economic reopening of the New York State, click here.
New York State Forward Loan Fund
New York state has announced a $100 million loan fund, of which $4 million will be lent in the Southern Tier, the region where Delaware County resides. Loans are for small businesses (with 20 or fewer employees,) non-profits and some landlords. The pre-application portal opens Mat 26 at noon and will be reviewed by Community Development Financial Institutions around the state starting June 1.
- Loan Amount:
- Small Businesses: Small businesses can apply for a loan in the amount of the lesser of (a) $100,000 or (b) up to 100% of average monthly revenues in any 3-month period from 2019 or first quarter of 2020.
- Nonprofits: Nonprofits can apply for a loan in the amount of the lesser of (a) $100,000 or (b) up to 100% of average monthly expenses in any 3-month from 2019 or first quarter of 2020.
- Small Landlords: Small Landlords can apply for a loan in the amount the lesser of (a) $100,000 or (b) projected reduction in 3-months’ net operating income based on actual reductions in net operating income for the month of April or May 2020.
- Interest Rate:
- Small businesses and landlords: The fixed annual interest rate on the loan will be 3%.
- Nonprofits: The fixed annual interest rate on the loan will be 2%.
- For months 1 – 12: Interest only payments, paid monthly.
- For months 13 – 60: interest and principal payments, paid monthly.
- Term: 5 years (60 months).
- Proceeds are required to be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, etc.
- Refinancing of an existing loan is not permitted.
- The loan applicant will be required to detail anticipated use of funds when they apply.
- Borrower Fees: No application fees. Late fee will be assessed for missed payments.
- Recourse: No collateral is required.
- Prepayment: Borrower may prepay the loan without penalty.
Click here for more information.
Broome County IDA/ LDC Emergency Low-Interest Loan Funds
The Broome County IDA, or “The Agency,” has created an Emergency Loan Fund, which has originated from its STEED funds, meaning Delaware County businesses are eligible for these loans. Benefits for these loans include waived payments for first 12 months, an interest rate 75% of the prime rate, no equity needed and an expedited closing process, so borrowers can access the funds as soon as possible. Below are the details and requirements for this loan fund. The loans are available on 3-5 year terms, excluding the 12 months of waived payment, therefore the payment period for a 3-year loan would be 4 years. Non-profit organizations are ineligible for these loans.
- Principal and interest payments (P&I) will be waived for 12-months (*after the 12-month deferral period interest rate will be 75% of the prime rate*)
- No application or closing fees
- 10% equity requirement waived
- 3-5 year terms
- Expedited closing process
- Expedited loan review process to include the following:
- Authorized Credit Check
- Financial Documentation Review:
- Most Recent Tax Return
- Draft or preliminary year-end financials for 2019
- List of current debt
- Additional documentation may be requested
- Non-profit organizations are not eligible
Applications can be found here.
Email completed applications to firstname.lastname@example.org.
Interested businesses should contact Tom Gray at (607) 584-9000 or email@example.com.
At the present time, Federal assistance for small businesses (fewer than 500 employees) is being made available through the U.S. Small Business Administration. The two programs are; the Economic Injury Disaster Loan program and the Paycheck Protection Program. These programs are designed to meet different business needs. Please click here for a summary of the key differences in the programs.
Economic Injury Disaster Loans *Re-Opened*
The EIDL program can provide working capital loans to pay fixed debts, payroll, accounts payable, installment loans, credit cards and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits. Loans are provided at an interest rate of 3.75% for a period of up to 30 years, as determined by SBA. A portion of the funding requested under the EIDL, up to $10,000, as determined by SBA, may be provided in the form of an Emergency Grant.
For a summary of the EIDL program, click here.
Answers to frequently asked questions can be found here.
Applicants apply directly to SBA at https://www.sba.gov/funding-programs/disaster-assistance, although paper submissions will be accepted.
Paycheck Protection Program
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities. Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. Funds are provided in the form of loans that will be eligible for forgiveness when used to pay payroll costs, interest on mortgages, rent, and utilities over the 8 weeks after the loan is provided. This is intended to be a payroll supplement program for the employer in order to keep employees on the payroll. It is not intended to be a way to capitalize a business. At least 75% of the forgiven amount must have been used for payroll. You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. You will also owe money if you do not maintain your staff and payroll. Loan payments will be deferred for six months, however any portion of the loan not forgiven must be paid back within 2 years after the deferral period. Interest on the loan is set at 1%.
Families First Coronavirus Response Act Paid Sick Leave Refundable Credit
The Federal Paid Sick Leave Refundable Credit may be an alternative to the Paycheck Protection Program. This legislation provides small and midsize employers refundable tax credits that reimburse them, dollar for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19, either for the employee’s own health needs or to care for family members. This tax credit also includes the employer’s share of Medicare tax imposed on those wages and its allocable cost of maintaining health insurance coverage for the employee during the sick leave period. For additional information go to https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs.
NYS Shared Work Program
The Shared Work Program gives you an alternative to laying off workers during business downturns by allowing them to work a reduced work schedule and collect partial Unemployment Insurance benefits for up to 26 weeks. Instead of cutting staff, you can reduce the number of hours of all employees or just a certain group.
Learn more here: https://www.labor.ny.gov/ui/employerinfo/shared-work-program.shtm.