Many resources are available that can help businesses with cash flow and working capital needs. We prepared this page to provide general information about resources that might be available to assist businesses with cash flow needs during the COVID-19 crisis. Terms of loans may vary. This does not cover all possible financing resources – there are still a number of other non-emergency SBA programs still active (for instance, SBA Express Loans – a non-disaster type loan – was increased in limits from $350,000 to $1,000,000 under the CARES Act).
Please consult with your attorney and financial institution for details specific to your circumstances and relief that might be available.
Last updated 3/31/20.
Paycheck Protection Program
This program was created by the CARES Act. Funding under this program focuses generally on payroll costs – hence “paycheck protection.” It is designed to help businesses cover up to 8 weeks of certain expenses. It may be forgivable if certain rules are followed. This program is administered through eligible financial institutions with the backing of the SBA.
Here are some highlights:
- Eligibility. For SBA “small businesses” and businesses with fewer than 500 employees (there are other details on eligibility, too).
- Amount. The amount of the loan is calculated at 2.5 times average monthly “payroll costs” (based on the preceding year) with a maximum of $10 million.
- For sole proprietors and independent contractors, “payroll costs” is a function of compensation or income that is a wage, commission, income, net earnings from self-employment, or similar compensation (there are some restrictions on this calculation).
- Additional Thoughts. For some businesses with smaller payrolls, more significant relief may be available under the SBA Economic Impact Disaster Loan or other available relief.
- Usage. Funds can be used for payroll costs, health care benefits certain mortgage interest, rent, utilities, and certain other interest expenses.
- Additional Thoughts. It is not immediately clear that a Florida bridge loan could be repaid using these funds, but the specific details of your loan may be different.
- Terms. Possible loan forgiveness with proper usage and following other guidelines. The forgiveness process should be developed by late April. For balances that are not forgiven, interest is capped at 4% and maturity is a maximum of 10 years. No personal guarantee or collateral is required.
- Additional Thoughts. If you are funded under this loan, it may make you ineligible for other programs.
SBA Economic Interruption Disaster Loan (EIDL)
This program exists to provide resources to small businesses suffering economic loss due to a disaster. Loans here are designed to provide businesses with working capital through the economic impacts of a disaster. Currently, these are not forgivable. But there has been a loosening of some of the requirements under the CARES Act.
Small businesses may be eligible for an emergency EIDL grant up to $10,000.00. The funds may be used for an allowable purpose under an SBA disaster loan, including paid sick leave, payroll, meeting increased costs, and rent and mortgage payments. This program is intended to provide quick funding to a business.
SBA Express Bridge Loan
Small businesses may be eligible for an express bridge loan up to $25,000.00. This program is administered by financial institutions who are authorize SBA Express Lenders. This program is intended to provide quick funding to a business.
Florida Small Business Emergency Bridge Loan
This program is intended to provide quick funding to a business, but is a short-term loan. The program generally requires a commitment that it will be repaid through a known source (like an SBA loan or insurance proceeds). The maximum amount is $50,000, though special cases could go up to $100,000. These are funded interest-free for one year, but then accrue 12% after that. There are required individual commitments, so business owners could be subject to personal liability for the loan. The specific details of your loan will govern.
More information can be found at the Florida SBDC.
Florida Short Time Compensation Program
This program exists to help avoid layoffs and instead focuses on reducing employee hours by certain percentages to lower payroll expenses. This program uses reemployment assistance benefits to on a prorated basis to continue paying employees.
More information can be found at the Florida Department of Economic Opportunity.
Other public and private grants may be available. We are monitoring what grants may be beneficial to our clients.
There is A LOT of information out there. We find these links to be helpful.
- US Chamber of Commerce
- Florida Small Business Development Center
- Florida Department of Financial Services
- SBA Resources
- Florida Business Damage Assessment Survey
This outline is based upon the presentation by C. Andrew Roy in the webinar on “Navigating Through Contracts and Business Operations During the Pandemic”. A recording of this presentation is available HERE .