Corona-virus pandemic has affected every field of life, but among these small and medium sized enterprises (SMEs), firms with fewer than 500 employees, is one of the extremely hard hit zones. Quoting Forbes, around 30 million small businesses are in distress throughout the US and half of these troubled businesses are blaming pandemic for decline in revenues.
In order to support SMEs in these unprecedented circumstances of recent times, US government and some of larger US corporations have come forward to provide some relief to these businesses. Few of the relief programs which might prevent SMEs finances from drying up are mentioned here.
Paycheck Protection Program is an emergency federal loan program crafted to support SMEs to paying their employees. Businesses with up to 500 employees can receive a loan for 2.5 times their monthly payroll costs or up to $10 million. The loan can be forgiven if businesses use at least 75% of the forgiven amount for payroll purposes. To provide relief to small businesses and nonprofits impacted by pandemic, the U.S. Small Business Administration (SBA) is working with state governors to provide disaster assistance loans at low interest rates to help them recover.
The interest rate for small businesses is 3.75%; the interest rate for nonprofits is 2.75%. Disaster assistance loan can be applied through SBA’s website
The Senate approved a nearly $500 billion interim coronavirus relief package, known as ‘COVID 3.5. The legislation provides additional funding for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan program (EIDL) to help SMEs.
The US Federal Reserve Board announced the establishment of Commercial Paper Funding Facility to provide liquidity to the financial system, help SMEs manage their finances and provide a liquidity backstop to US issuers of commercial paper.
Facebook through its Small Business Grant Program is pledging $100 million in cash grants and ad credits for small businesses impacted by COVID-19. Funding will be available to 30,000 eligible small businesses in 30 countries Facebook is operating.
States are introducing new programs, in addition to existing disaster relief programs.
For example, In California, the city of Sacramento has started Donate for Sacramento campaign, where funds are being raised for businesses impacted by COVID-19, or for the homeless, nonprofits, or families in need. Federal tax filing deadline has been extended for individuals and SMEs. Typically, taxes are due by April 15th but this year it has been extended to July 15, 2020 for tax payments of up to $10 million. It may be a difficult time for SMEs but efforts of government, large organizations and public can help them survive through this. At the same time, it is essential for SMEs to look for different ways to continue doing business. We can assist you and review options financing options available to SMEs in US on this link: sendorcapital.com