The COVID-19 pandemic had a quick and in some cases devastating economic effect as officials put social distancing measures in place to stop the spread of the new coronavirus. In response, public officials stood up big, new programs to provide assistance for small businesses quickly last week.
On Monday, Gov. Larry Hogan announced a $175 million emergency funding program to provide funds. By Friday afternoon in D.C., Pres. Donald Trump signed the CARES Act into law, which counts small businesses among the many sectors of the economy that it aims to help in a time when many have been forced to lay off workers or closed. (Watch this explainer of how the relief bill can benefit startups.)
As officials look to keep moving to start getting funds dispersed, the scope of the programs are coming into relief.
“This is the largest single relief package ever passed by the Congress of the United States,” U.S. Sen. Ben Cardin (D-Maryland) said of the CARES Act on a webinar Tuesday.
At the event organized by the Baltimore Development Corporation and M&T Bank, Cardin joined officials including Maryland Secretary of Commerce Kelly Schulz and Stephen Umberger, the director of the U.S. Small Business Administration’s Baltimore office, to outline the programs that are available.
Here’s a breakdown of what’s available for Maryland small businesses now. We’ll update as we get more info:
Paycheck Protection Program
The CARES Act includes $350 billion for this loan program that’s designed to encourage companies to keep folks on payroll. The key incentive? If a team stays together, the loan is forgiven. Administered by community banks and financial institutions, the loans can be used for payroll costs, rent and utilities. Businesses can borrow up to 2.5 times of those expenses for the loan period. The application is here, but borrowers must consult local banks and other SBA-approved lenders. According to this fact sheet, small businesses and sole proprietorships can begin applying and receiving loans on April 3 through existing SBA lenders. Independent contractors and self-employed individuals can begin applying on April 10.
Employee Retention Credit
The CARES Act also includes a 50% tax credit for businesses that were impact by COVID-19 for wages of employees up to $10,000. The credit is available to all employers, regardless of their business side, according to the U.S. Treasury Department.
Economic Injury Disaster Loan
Maryland was approved as a state where companies can apply for loans through this U.S. Small Business Administration program. The loan is available for businesses with fewer than 500 employees, as well as sole proprietorships, independent contractors and cooperatives and private nonprofits.
It’s designed to provide working capital, and up to half of a prior year’s gross profit is offered. Approvals can now be made solely based on an applicant’s credit score. Loans that are smaller than $200,000 can also be approved without a personal guarantee.
With passage of the CARES Act, the SBA is also now offering applicants a $10,000 emergency grant, which functions as an advance on the loan. It will be approved within three days of an application, and does not have to be paid back if the loan is denied. Apply here.
Of note: Umberger said businesses could be able to qualify for both the EIDL and Paycheck Protection Program. But as the Paycheck Protection Program is rolling out, he encouraged business owners to move forward with an EIDL application right away.
He also added that initial bugs with the SBA website have been fixed, and the applications have been streamlined.
Maryland Small Business COVID-19 Emergency Relief Loan Fund
The $75 million loan program offered through the Maryland Department of Commerce offers loans of up to $50,000 for businesses with fewer than 50 employees. The loan offers deferral of payments and no interest for the first 12 months, then converts to a 36-month term. Apply here.
Maryland Small Business COVID-19 Emergency Relief Grant Fund
This $50 million grant program offered through the Maryland Department of Commerce. Grants of up to $10,000 are being offered to provide working capital for small businesses and nonprofits. It is meant to complement actions taken with banks, insurance and other financial partners. Apply here.
Maryland COVID-19 Emergency Relief Manufacturing Fund
The $5 million incentive program is offering grants of up to $100,000 for businesses that make personal protective equipment or other items identified as critical needs for healthcare providers and first responders during the pandemic, such as hand sanitizer, ventilators, Tyvek suits and more. The grants are designed to increase existing operations, or pivot operations. Apply here.
The state also created a COVID-19 Layoff Aversion Fund through the Maryland Department of Labor, but it was no longer accepting applications as of March 31.
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