Coronavirus: Small Business Updates and Resources
Updated: January 11, 2020, 12:51 PM
In light of the continuing concerns surrounding COVID-19 (coronavirus), the Florida SBDC at UCF has suspended all in-person activity at all of our main offices, as directed by the University of Central Florida and the Florida SBDC Network. We will continue to provide consultation services via telephone and video chat.
On Sunday, December 27, 2020, President Trump signed the “Consolidated Appropriations Act of 2021,” which provides additional assistance to small businesses, nonprofits, and venues struggling from the impacts of the COVID-19 pandemic.
The bill provides funding for a second round of Paycheck Protection Program (PPP) forgivable loans, Economic Injury Disaster Loan (EIDL) grants, a special grant program for shuttered venues, and enhancements to other SBA lending programs.
Paycheck Protection Program (PPP) Loan
Short-term, potentially forgivable loans to eligible small businesses, independent contractors or other self-employed individuals, nonprofits, housing cooperatives, news organizations, and other eligible entities that retain employees, maintain payroll, and use for other allowable operating expenses.
PPP loans are administered and approved through SBA-certified lending institutions.
Congress has made funding available to eligible businesses that have previously received a PPP loan.
Amount: Lesser of 2.5x average monthly payroll costs or $2 million
Interest and Terms: 1% for a term of five years for any amount not forgiven
Personal Guarantee: None
Deadline: March 31, 2021
Borrowers are eligible for a second-draw loan of up to $2 million if they have:
- 300 or fewer employees
- Used or will use the full amount of their first PPP loan on or before the expected date for the second PPP loan to be disbursed to the borrower. The IFR also clarifies that the borrower must have spent the full amount of the first PPP loan on eligible expenses.
- Experienced a revenue reduction of 25% or more in all or part of 2020 compared with all or part of 2019.
Limited to the amount spent on payroll costs and allowable operating expenses during the 24-week period beginning on the date of the origination of the loan.
At a minimum, 60% must be expended on payroll costs to be forgiven.
Second draw borrowers with a principal amount of $150,000 or less are required to provide documentation of revenue reduction if such documentation was not provided at the time of the loan application as specified in subsection (g)(2)(iv) and (v) of the SBA’s IFR.
Proceeds may be used to pay payroll costs, mortgage interest, rent, utilities, interest on pre-existing loans, costs related to the continuation of benefits, refinancing an EIDL loan made between January 31, 2020 and April 3, 2020; covered operations expenditures, covered supplier costs, and covered worker protection expenditures.
How to Apply: Contact your local bank, credit union, or other SBA-certified lender to apply or for more information.
Economic Injury Disaster Loan (EIDL) & Emergency Advance Grant
Long-term, low-interest working capital disaster loans for qualified small businesses and U.S. agricultural businesses that suffered substantial economic injury due to COVID-19.
EIDLs are administered and approved directly by the SBA.
Amount: Up to $2 million
Interest and Terms: 3.75% for a term up to 30 years
Collateral: Loans of more than $25,000
Personal Guarantee: Loans of more than $200,000
Deadline: December 31, 2021
Small businesses with less than 500 employees (including sole proprietorships, independent contractors, and self-employed persons), private non-profit organizations, or 501(c)(19) veterans organizations affected by COVID-19 are eligible.
Agricultural businesses are also eligible, including those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).
The EIDL loan is not forgivable, however, you may apply for an EIDL loan advance, which you do not have to pay back. Applicants may request at the time of application a loan advance of up to $10,000 ($1,000 per employee).
How to Apply:
Apply online directly with the U.S. SBA at https://covid19relief.sba.gov
Note: You can apply for both PPP and EIDL—you just can’t use the funds for the same purpose.