WHERE
ILLINOIS SMALL BUSINESSES CAN GET GOVERNMENT FINANCIAL HELP
Illinois Policy Institute/
Ben Szalinski
The
federal government authorized a financial aid program for small
businesses that have closed their doors due to the COVID-19 pandemic,
but state and local government also offer assistance. |
Small businesses around the nation are struggling as many have
closed to adhere to social distancing guidelines to stop the spread of COVID-19.
In Illinois, it has been especially difficult as the state was one of the first
to implement a stay-at-home order.
However, small businesses of all types are eligible for relief through loan
programs passed by Congress and at the state and local level. Here is a guide.
Federal assistance
Paycheck Protection Program
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Authorized by Congress to give small businesses loans to
pay their bills and employees
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Small Business Administration opened access to $349 billion
of loans.
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For businesses with fewer than 500 employees and that were
established by Feb. 15
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The loan is forgivable up to 250% of a business’s monthly
payroll costs, capped at $10 million
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Businesses do not have to show creditworthiness to apply
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Money used for eight weeks of expenses can be kept as long
as the business can produce a receipt showing it was used for payroll,
health care, interest on mortgages and bills for rent or utilities
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Payments on the loan used for other purposes can be
deferred for up to six months
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The loan has a maximum interest rate of 1% and maturity of
two years
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Businesses can rehire employees and use the loan to cover
the cost of their paychecks
Also in the works is a $4 trillion lending program set up by
the Federal Reserve and U.S. Treasury Department. The program was made possible
because $454 billion appropriated by Congress can be multiplied many times as
loans as a result of most of them eventually being repaid.
Payroll tax credit
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Employers who are shuttered by government order or see a
50% loss compared to the previous year are eligible for a payroll tax credit
if they do not accept a loan under the Paycheck Protection Program
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This is a 50% tax credit for wages up to $5,000 per
employee
-
It applies to wages between March 13 and December 31, 2020
Employers are also eligible to receive payroll tax credits for
sick leave benefits to workers who are sick from or idled as a result of the
coronavirus.
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State assistance
Illinois has made over $90 million in assistance available for small
businesses outside of Chicago.
Illinois Small Business Emergency Loan
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$60 million for businesses in any industry
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Businesses must be located outside Chicago
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Loans will be given up to $50,000
Downstate Small Business Stabilization Program
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A partnership with local governments
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Funds are meant to pay for 60 days of operation
for non-essential businesses
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Applies to businesses with fewer than 50
employees
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Grants are available for up to $25,000
Hospitality Emergency Grant Program
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Relief fund of $14 million run by the Illinois
Department of Commerce and Economic Opportunity for small
businesses in the hospitality industry
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Bars and restaurants that generated between
$500,000 and $1 million in revenue in 2019 can receive up to
$25,000
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Bars and restaurants that generated less than
$500,000 in revenue in 2019 can receive up to $10,000
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Hotels that generated less than $8 million in
revenue in 2019 can receive up to $50,000
The SBA has also made available Disaster Assistance
Loans up to $2 million for Illinois businesses impacted by losses
from coronavirus.
Local assistance
Chicago $100 million relief package
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Funded by a public-private partnership
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Businesses that experienced a 25% decrease in
revenue and have fewer than 50 employees
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Loans are for up to $50,000
Cook County Community Recovery Fund
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$10 million in seed money for 0% loans for
suburban small businesses and independent contractors
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Small businesses with fewer than 25 employees,
less than $3 million in revenue, can get loans up to $20,000
Gig workers and those with over half of income from
1099 contract work can get loans up to $10,000 if they have less
than $100,000 in gross annual incom
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