—   Small Business Matters   —

COVID-19 Relief for Small Business

Mara Schoner
By Mara Schoner

April 3, 2020

The COVID-19 pandemic seemed to come out of nowhere and is now impacting our lives in profound ways every day. As new information comes in, we will update this page with loans, grants, regulations and upcoming legislation relevant to small businesses and individuals.

Update 4-14-20

The Federal government is requesting another $250 billion for the Paycheck Protection Program because of the “popularity” of the program.

We have also heard that Business Interruption Insurance does not cover in the case of pandemics.

Finally, there have been more strings placed on the PPP grants. The grants are still worth up to $10,000 and must be used for at least 75% for payroll, but they are now limiting them to $1000 per employee “to ensure that the greatest number of applicants can receive assistance during this challenging time.” (As per the Small Business Administration.)

We brought up in the first installment of this blog post that despite the fact that small businesses were employing half the country up until the pandemic, the lion’s share of aid is being given to the large corporations. Again, we might begin envisioning some kind of lobbying organization to pressure government officials to weigh the needs of small businesses equally to the large corporation in the future.

Update 4-6-20

The $1200 stimulus payments will be coming soon! (Plus $500 for children under 16.) Have you registered your bank info with the IRS yet? You will receive your money earlier that way. If not, the IRS will soon have a portal set up so you can connect your bank to the IRS for direct deposit.

The COVID-19 Stimulus Package

On March 27, the House passed a $2 trillion stimulus package which favors large corporations over small businesses, despite the critical role we play in the economy. Don’t forget, we account for 99.9% of American businesses, and we employ 47.5% of the workforce!

As we move through the COVID-19 pandemic, we'd like to consider how small businesses locally, on a state level, and around the country can organize to become a lobbying force.

The stimulus bill will provide relief to individuals and small businesses in the following ways:

$367 billion in low interest small business loans. Please note: If you use the loan in part to keep your employees on payroll for at least eight weeks, the government could forgive this loan. (See details below.)

A one-time $1,200 payment to American adults with annual incomes up to $75,000, plus another $500 per child (age 16 and under). Some Americans earning more than $75,000 would also receive money if they meet certain qualifications. For most Americans, the money is likely to arrive in April via direct deposit. Mailed checks may take longer.

There is at least one exception to the stimulus checks (which will affect us, as well as many of you): dependents 17 years of age and older will not qualify as children for the $500 add-on, and in most cases they will not qualify for the $1200 check.

While it’s an important step that some aid will be coming for individuals and small businesses, it isn’t nearly enough. What’s more, we wish that the aid package for small businesses and individuals had been negotiated apart from the massive bailout for big corporations. Many of these corporations used bailout funds from the 2008 recession and cheap money from the Fed to buy back their own stocks, contributing to the financial instability of the American economy. It would have made more sense to first address the needs of our country's more vulnerable households and small businesses, and then see on a case-by-case basis which corporations truly require a bailout. In addition, there is currently no coverage for COVID-19 treatment.

More on the small business loans and how to apply:

Loans are limited to one per Taxpayer Identification Number

Overview of the loans: https://home.treasury.gov/coronavirus

The Paycheck Protection Program (PPP)

Purpose: This program is designed for small businesses to keep their workers on payroll. PPP was rolled out April 3 for small businesses. On April 10 independent contractors and self-employed individuals will be able to apply.


Eligibility: If you’re a company with fewer than 500 employees the government will provide you with a loan equivalent to eight weeks of your prior average payroll (or, for the self-employed, earnings), plus an additional 25 percent of that sum.

Any business entities that were in operation on February 15, 2010, small business, individuals who operate a sole proprietorship or as an independent contractor, and self-employed individuals are eligible for the loan.

Amount of funding: The loan size is calculated as 2.5 times the average monthly payroll costs of the 12 months prior, up to $10,000,000. The SBA will forgive loans if employees are kept on payroll for 8 weeks (or quickly rehired and put back on payroll). 75% of the loan must be spent on payroll. Other uses for the money are: rent, mortgage interest, utilities.

How to apply: You would apply through your lender for loan forgiveness and would need to show receipts and payroll.

Terms of the loan are 4.00%, principal and interest deferred 6-12 months, but interest accrues during deferment. All borrower fees are waived.

Economic Injury Disaster Loans and Loan Advance (EIDL Loan) & Emergency Economic Injury Grant

How to Apply: Apply for an EIDL and then request an advance. The advance does not need to be repaid. You can apply online at the following link:


Up to $10,000 advance will be deposited in your account within three days of applying for an EIDL. The lender is the Small Business Administration.

Eligibility: Companies with fewer than 500 employees, small business, individuals who operate a sole proprietorship or as an independent contractor, and self-employed individuals are eligible for the loan.

Amount of Loan: The maximum loan amount is $2,000,000. You are not required to repay the $10,000 advance.

Terms: The loan's interest rate is 3.75%. You can defer from one to four years, but interest accrues during deferment. This loan is not subject to forgiveness. (Again, the advance of up to $10,000 is forgiven if you meet the payroll qualifications.) The emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the Payroll Protection Plan.

Are the EIDL and the PPP Connected in Any Way?

The PPP and EIDL loans and grants are connected in that if you receive a $10,000 grant from the Economic Injury Grant, that money would be subtracted from any funds you would receive from the Paycheck Protection Program.

What is an essential service? Does my service count as essential?

Most construction and landscape services are considered “essential businesses” by the state of California. Essential services are allowed to continue working during the COVID-19 lock-down.

Los Angeles County has written its own list of Essential Services which you can view in this document: http://ph.lacounty.gov/media/Coronavirus/COVID-19_SaferAtHome_HealthOfficerOrder_20200319_Signed.pdf

Please exercise great caution and follow all social distancing guidelines if you choose to work during this period. Remember that others' lives are greatly impacted by our actions during this pandemic. We are all in this together!

Do you know of other resources we should include here? Keep us in the loop via the comments below or by contacting us directly.

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