Financial Assistance for Small Businesses Impacted by COVID-19

COVID-19 Financial Resources for Small Businesses

Phoenix Online Media understands there is a lot of confusion about what funds will be available to support small businesses through the effects of COVID-19. To help our clients navigate these uncertain waters, we have partnered with Monica Chipman, a financial services professional based in Scottsdale.

Monica graciously offered to answer any questions you have. Complete the form here and she will respond as soon as possible. Monica was also instrumental in compiling this summary of the 800-page CARES Act so you can better understand your options.

The COVID-19 pandemic is a constantly evolving situation with the government response growing daily. We will update this page as more programs or assistance become available.

Please note that the following is the most up-to-date information we have on these programs. We highly recommend talking to your own financial advisor, accountant, or attorney.

Government-Backed Financial Assistance for Small Businesses

In times of crisis, the United States Government has always offered financial assistance to small businesses. To support organizations during COVID-19, there are two Federal Acts (FFCRA and CARES) that place requirements on and make dollars available to small businesses.

Small Business Administration building exterior view

Economic Injury Disaster Loans

The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) are the first line of support. These loans aren’t new. They’ve always been available in the event of a disaster. However, according to Alex Contreras, Director of Preparedness, Communication, & Coordination at the Office of Disaster Assistance for the SBA, this is the first time a virus or pandemic event has been defined as a disaster. Mr. Contreras emphasized just how vital this declaration was, “It’s a historic event for us; it’s a national emergency.”

Because of that declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster Loans. (If you applied before the declaration was made, you might have been rejected because SBA Disaster Loan Assistance was unavailable for coronavirus-related economic impact at the time.) These loans are the only form of SBA loans that are not limited to small business.

EIDL Terms and Provisions

The SBA offers many favorable terms in their EIDLs:

  • Loans are up to $2M
  • The term is 30 years
  • Interest Rates are 3.75% for small business and (2.75% for non-profits)
  • The first month’s payments are deferred for a full year from the date of the promissory note.

The EIDLs expanded provisions include:

  • EIDLS can be approved by the SBA based solely on an applicant’s credit score (not repayment ability and no tax return is required). Mr. Contreras specified that a prior bankruptcy doesn’t disqualify you.
  • EIDLS smaller than $200,000 can be approved without a personal guarantee. They are also not requiring real estate as collateral and will take a general security interest in business property.
  • Borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss.
  • It expands access to sole proprietors or independent contractors, as well as tribal businesses, cooperatives, and ESOPs with fewer than 500 employees and all non-profits, including 501(c)(6)s.

The $10,000 emergency cash grants are particularly interesting. As Mr. Contreras explained, applicants can get emergency cash even if they don’t qualify for additional funds. Because lending decisions are based on self-certification and the applicant’s credit score, the review process should go quickly. CARES also waives the requirement that you be unable to obtain credit elsewhere. That means you can apply even if you already have a credit line.

How to Apply for an Economic Injury Disaster Loan

You apply for these loans directly through the SBA at There are no loan fees, guarantee fees, or prepayment fees. As of March 30, the new streamlined online application is up and running. Make sure to apply for Economic Injury for the Coronavirus, rather than physical damage due to another disaster (that is a different declaration number).

You have to have been in business by January 31, 2020 to qualify, so you can’t start a business now and receive this kind of grant. The SBA also offers other information and programming at

How long will it take to get the money? Unfortunately, there is no definitive timeline from application to approval on these loans. There are some 30 million small businesses in the United States. In a busy year, the SBA processes over 800,000 applications. If the 6.6 million unemployment numbers show anything, there will be a lot of demand for this relief (and systems may be overloaded). Monica’s advice: apply as soon as you can.

US treasury check and envelope

Paycheck Protection Program Loan Guarantee

On Friday, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It’s an estimated $2 trillion package, which specifically allots $10 Billion for EIDLs and $350 billion for Paycheck Protection Loans to help small businesses. The loans through the CARES Act are separate from the EIDL loans.

The CARES Act’s Paycheck Protection Program Loan Guarantee offers another source of relief. Under this program, the SBA backs small-business loans through local lenders. According to William Briggs, Deputy Associate Administrator in the Office of Capital Access in the SBA, they currently work with 1,800 lenders and plan to expand that given the anticipated demand. I have outlined the key points below although, feel free to access the link on the treasury site to read the Fact Sheet.

CARES Act’s Paycheck Protection Program Loan Guarantee Details

Here are the particulars of this loan program:

  • Offered to small businesses with fewer than 500 employees, select types of business with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(C)(19) veteran organization (have to be in operation before February 15, 2020).
  • Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply (again, you have to be in operation before February 15, 2020).
  • 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.
  • The maximum interest rate under this program is 4%.
  • The loan term is up to 10 years.
  • No personal guarantee or collateral is required for the loan.
  • Payments are deferred up to six to 12 months.
  • Part of this loan may be forgiven and not counted as income to you, if it’s spent during the first eight weeks on operating expenses.

As with the $10,000 advance in EIDLs, loan forgiveness provisions are generous. Loans are forgiven when the proceeds are used for any of these costs:

  • Payroll costs, excluding prorated amounts for individuals with compensation greater than $100,000
  • Rent pursuant to a lease in force before February 15, 2020
  • Electricity, gas, water, transportation, telephone, or internet access expenses for services which began before February 15, 2020
  • Group health insurance premiums and other healthcare costs

CARES Act’s Paycheck Protection Program Loan Guarantee Stipulations

A word of caution with this loan. In order for the amounts to be forgiven, you must maintain the same average number of employees for the first eight-week period beginning on the origination date of the loan as you did from February 15, 2019 – June 30, 2019 or from January 1, 2020 until February 15, 2020. If you don’t meet this requirement, the amount forgiven is reduced. You incur additional reductions if you cut compensation for employees who make under $100,000 by more than 25%, as compared to the most recent quarter. (The US Chamber of Commerce offers a step-by-step calculation here).

And of course there’s an exception to the exception: you won’t be penalized for a reduction in employment or wages during the period from February 15, 2020 to April 26, 2020, if you rehire employees that you previously laid off or restore any decreases in wages or salaries by June 30, 2020.

As I mentioned above, you apply for the Paycheck Protection Loan directly through your local lending institution. As a business owner, you must personally certify that your company qualifies as a small business (you can check the North American Industry Classification System (NAICS) small business standards here).

Experts expect very significant demand for this type of loan. The agencies associated are already working on guidance to go out to these local institutions as soon as possible. You can help yourself prepare by using this checklist from the Chamber of Commerce and contacting your local lender.

Sepia toned compass

Navigating the loans with tricks of the trade

Both of these programs can provide a significant boost to struggling businesses. You can use these loan proceeds to pay a variety of working capital including payroll, rent, utilities, etc.

The demand will be high, so it’s important to make sure you apply for the right type of loan for your business. Here are some other helpful tips that might come in handy:

  • Apply! If you need funding now, or think you may need it in the future, you might as well apply now. You’re under no obligation to take the loan. And as I mentioned, there are no guarantee fees, servicing fees or prepayment fees.
  • EIDLs are based on working capital needs, so make sure you have a good sense of what those are. Have your costs and documents ready and up to date!
  • You can apply for both types of loans, as long as they cover different expenses (not a duplicative purpose). This is also true if you’re pursuing other local or regional government assistance. (More on these services as they become clear.)
  • For the EIDLs in particular, the SBA does not work with “loan packagers.” So, there’s no need to pay someone to put an application together for you. You can apply directly through the website.
  • Make sure to specify the economic loss as it pertains to COVID-19. There’s no need to fill out the physical damage part, if that doesn’t apply to you.

While both of these loans are widely available, there are still some companies that won’t have access to these loans. Cannabis companies, for instance, won’t qualify, as their business is still illegal on the federal level, despite being legal in 11 states and DC (and medically legal in 33). In addition, some industries that work in the encouragement of sexual activities for financial gain cannot apply.

Links, Forms, and Guidance

Below are links to each program available to help small businesses through the CARES Act. If you need direction deciding which, if any, of these programs can help you, the Small Business Administration provides free counseling. If you have questions about whether you qualify, repayment obligations, or similar issues, the SBA is a good place to start.

SBA Free Business Counseling

Paycheck Protection Program

Economic Injury Disaster Loan

SBA Express Bridge Loans

SBA Debt Relief

All applications must be digital (i.e. completed online). However, it helps to review the form before you get started to gather all relevant information. Below are forms and guidance for these programs.

Guidance from the U.S. Chamber of Commerce

EIDL Information and Documentation

Paycheck Protection Program Application

Paycheck Protection Program Fact Sheet

SBA Express Bridge Loans

The Express Bridge Loan Pilot Program allows small businesses who already have a relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide economic support to help small businesses overcome the temporary loss of revenue they are experiencing. A Bridge Loan may help “bridge” the gap in revenue while you apply for a direct Economic Injury Disaster Loan or await disbursement.


  • Up to $25,000
  • Fast turnaround
  • Loan must be repaid, either in full or in part, with proceeds from the EIDL

You can find an Express Bridge Loan lender through your local SBA District Office.

Paid Family & Sick Leave

Paid sick and family leave for COVID-19 is mandatory under federal law. On March 18, 2020, the U.S. government passed the Family First Coronavirus Response Act (FFCRA) to help employers cover these costs.

The U.S. Department of Labor unveiled two new payroll tax credits specifically for small and midsize employers. Under FFCRA, employers are reimbursed dollar-for-dollar for the cost of any coronavirus-related leave their employees require. Read the press release here.

The IRS also created this FAQ to help employers understand the new tax credits.

COVID-19 and Your Finances, What You Need to Know

A Message from Monica

Monica Chipman bio imageMy name is Monica Chipman and I am partnering with Phoenix Online Media to help small businesses and individuals find a path to financial security through the life of their business or employment and into a comfortable retirement. I’ve seen a lot of pain, fear, and anxiety these past few weeks. Many people I know are hurting and simply can’t find answers and direction right now. Who could have imagined this time last year, in the midst of record economic growth and returns, a pandemic would overshadow it all and bring everything to a screeching halt, leaving you without answers on how to meet payroll, rent, and other bills for your business?

According to Chase, only half of small businesses hold enough cash reserve to cover 27 days of expenses. But even if you’re well-prepared with a more significant financial buffer, you still need to plan for what happens if that runs out and no one knows how long this current financial turmoil will last. What you need right now is guaranteed cash flow!

I wish you all the best during these trying times and hope you receive the funding needed for your business. A lot of issues and questions will come up as you navigate the FFCRA and CARES Acts. Feel free to reach out to me via the online form and I will endeavor to answer your questions and help you in any way possible as new information becomes available.

Schedule a Complimentary COVID-19 Small Business Resources Consultation with Monica Chipman:

Comments 1

  1. Extremely helpful and easy to read. I am very grateful for the easy breakdown I will devour this information over the weekend. I feel like I have an accurate starting point.

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