The Northland SBDC is here to help you with information and guidance through the COVID-19 pandemic, and there are several state and federal COVID-19 assistance programs to assist small businesses.
Economic Injury Disaster Loan
In response to the Coronavirus (COVID-19) pandemic, small business owners and non-profit organizations in all U.S. states, Washington D.C., and territories are able to apply for an Economic Injury Disaster Loan (EIDL). EIDL is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. EIDL proceeds can be used to cover a wide array of working capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments.
SBA resumed accepting new Economic Injury Disaster Loan (EIDL) applications on June 15 to all qualified small businesses, including U.S. agricultural businesses.
The new eligibility for U.S. agricultural businesses is made possible by new authority granted by Congress in response to the COVID-19 pandemic.
If you have already applied via the streamlined application portal, please do not resubmit your application.
Express Bridge Loan
The Express Bridge Loan allows SBA Express Lenders the authority to expedite up to $25,000 in emergency funds for disaster-related purposes to help overcome the temporary loss of revenue while applying for the SBA EIDL.
Up to $25,000 will be repaid in full or in part by proceeds from the EIDL loan
Payroll Protection forgiveness
The Paycheck Protection Program (PPP) is designed to provide a direct incentive for small businesses to keep their workers on the payroll.
The SBA will forgive PPP loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
Businesses may apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. It is a good idea to consult first with your local lender to find out if they are participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020. The Paycheck Protection Program will be available through June 30, 2020.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 1%.
- PPP Forgiveness Application Guidelines
- Frequently Asked Questions for Lenders and Borrowers
- Affiliation Rules Applicable for the Paycheck Protection Program
- Frequently Asked Questions for Faith-Based Organizations participating in the PPP and the EIDL
- The Interim Final Rule for Applicable Affiliation Rules for the PPP
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
Current Loan Debt Relief
For current U.S. Small Business Administration Serviced Disaster Home and Business Loans and if your disaster loan was in regular servicing status on March 1, 2020, the SBA is providing automatic deferments through December 31, 2020.
What does “automatic deferral” mean to borrowers?
- Interest will continue to accrue on the loan.
- 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due.
- The deferment will NOT cancel any established Pre Authorized Debit (PAD) or recurring payments on your loan.
- Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply for those payments normally as if there was no deferment.
- After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments. Borrowers that canceled recurring payments will need to reestablish the recurring payment.
If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your Loan Servicing Office directly.
State of Minnesota Assistance
There are various Minnesota COVID-19 assistance programs available to businesses affected by the COVID-19 pandemic.
In a crisis, misinformation can spread quickly as people are thirsty for news and rumors spread fast. We need to counter that by letting people know exactly what’s going on, and what resources are available for help. Here are some MN.gov links to share with the business and civic community:
- For Businesses: Safely Returning to Work
- General questions about how COVID-19 affects businesses
- State of Minnesota Government News
- Learn how to apply for the SBA Disaster Loan for small businesses
- Information about how unemployment insurance works
- Apply Online for Unemployment Benefits
- Information on delaying your sales and use tax payments
Minnesota Financing Programs
Our business financing programs help companies and communities retain existing jobs and create new high-quality jobs. Not all businesses are eligible. Qualifying companies must meet specific job creation and wage goals.
COVID-19 Disaster Security
As with most significant global events, cyber criminals will leverage the event against potential targets to advance or achieve a malicious goal. This is most often carried out through phishing attacks. The cyber criminals send emails claiming to be from organizations that a recipient might expect to hear from, considering the current event. For example, with the COVID-19 disease, the emails may appear to come from a government health organization such as the CDC or other health care authorities. Users should be aware of this tactic and utilize good cyber security hygiene to include:
- Understand a government organization will never ask for your personal information in an email!
- Check the email address of the sender; don’t rely on the name that is displayed, and inspect the elements of the email address, especially the domain information (after the @ sign).
- Inspect any web links before clicking on them, by hovering over the URL with your mouse cursor to see where it directs to.
- As with any possible phishing email, watch for grammatical and spelling mistakes, and delete any emails that appear suspicious.
- Also, avoid emails that utilize generic greetings or are trying to instill a sense of urgency for you to act.
- Don’t open any attachments from ANYONE unless you are expecting the attachment!
Businesses should review, and where needed, update their Business Continuity of Operations Plans, to include backing up critical business data (local and off-site) and testing those backups to ensure you can recover using the backups.
If you or your employees are able to work remotely, take the following into consideration:
- Ensure that your business has a current cyber security policy that includes remote working.
- Utilize a trusted VPN utility to connect to work resources when on any network outside the business.
- Plan for non-business owned devices to connect to your organization or process business information.
- Identify, test, and utilize a collaboration tool that can be used among coworkers while working remotely.
- Don’t store a sensitive business information in an insecure environment (home office, external unencrypted hard drive, open laptop, a public folder residing in the cloud, etc.)
- Identify who will provide IT support to remote workers and how to contact that IT support resource.