While government-mandated business restrictions in response to the coronavirus pandemic have saved hundreds of thousands of lives, they have also resulted in many challenges. This is especially true for small business owners. Many have had to close entirely, fearing how the business will (or will not) continue when restrictions are lifted. One of the ways you can keep yourself afloat during this time is by getting a small business grant. Thanks to these steps provided by the 401k/ Retirement Savings Plan firm, Ubiquity, here’s how to do it.
How to Qualify for a Small Business Grant or Loan
On March 27 of this year, the CARES (Coronavirus Aid, Relief, and Economic Security) Act was signed into law with bipartisan support. This law has made it much easier to acquire financial assistance as businesses close to protect patrons and staff from the virus. Under this law, business owners will be able to apply for the following loans and grant:
- Paycheck Protection Program (PPP) Loan | How to Qualify: Qualifying businesses should have been established on or before February 15, 2020, and have a maximum of 500 employees. Those able to apply also include independent contractors, sole proprietorships, and those who are self-employed. Don’t worry about searching for funding elsewhere before approaching the U.S. Treasury Department for this loan.
- Note: The funds must be used for rent, utilities, and payroll expenses to qualify for loan forgiveness.
- Economic Injury Disaster Loan (EIDL) or Grant | How to Qualify: (Criteria for both loans and grants are the same.) Qualifying organizations must have 500 or fewer employees, and be a private nonprofit, agricultural business, cooperative, or tribal business. You may also qualify if you own a sole proprietorship, are an independent contractor, or are otherwise self-employed. Only companies that were established on or before January 31, 2020, may apply. The pandemic must have also directly impacted business operations.
- Note: This loan/grant requires a credit check, especially for business owners with at least a 20% stake in their company.
How to Apply
Now that you have confirmed your qualifications, you can proceed with the application:
- Gather the necessary documents:
- PPP Loan:
- Color copy of both sides of the owner’s driver’s license
- 941 Quarterly tax filings
- 944 annual tax filings
- One full year of bank statements
- Past year of payroll register
- PPP Loan:
- Loan application documents
- Tax information authorization
- Personal financial statement
- Schedule of liabilities
- Federal income tax returns
- Download and fill out the PPP loan or EIDL loan/grant application form.
- When submitting the EIDL form, check the box that asks whether you would like to be considered as an applicant for the grant.
After submission, funding for PPP Loans will be disbursed about ten days following approval. EIDL, on the other hand, can take up to 21 days. If the funding runs out, don’t worry, there are still options to save your business. The CARES package also provides an extension to the tax deadline, paid sick leave, and business interruption insurance to help soften the economic blow. You can also contact an experienced financial advisor. With their help, even with the depleted grant or loan funds, you can develop strategies that will keep your business strong, despite the present devastation. Contact an advisor today to get started.