With many of Michigan’s small businesses and restaurants closed by Executive Order as result of COVID-19 until at least April 13, 2020, many business owners are looking for relief to remedy their losses.
The MEDC announced the Michigan Small Business Relief Program to fund $20 Million to Support businesses impacted by COVID-19.
The fund is divided into grants and loans. Ten million will be distributed as up to $10,000 grants to pay for working capital, rent, payroll, etc. Businesses must show they have suffered a loss due to the coronavirus, and also have fewer than 50 employees. The grants are just that, and do not have to be paid back. Apply through https://www.michiganbusiness.org/about-medc/covid19/
The remaining ten million will be reserved for loans between $50,000 – $200,000. These loans are intended for larger businesses, with up to 100 employees. The loan proceeds can be used for any working capital needs; but the loans will be personally guaranteed and must show an ability to repay. The terms of the loan are very favorable to the borrower with interest rates as low as .25%, and the first 60 months interest only payments; after that the amortized over 5 year period.
The information is fluid, but more information can be found https://www.michiganbusiness.org/about-medc/covid19/
The Federal government is also doing its part by releasing $1 billion in disaster loan relief through the SBA – Small Business Administration. The SBA will provide loans of up to $2 Million to cover loss of revenue due to Covid-19. The loans must be to repay fixed debts, utilities, rent, accounts payable and will have interest rates of 3.75% interest, 2.75% for nonprofits. See Disasterloan.sba.gov for more information. The SBA will look into personal credit history, and the loans will have to be personally guaranteed, however they will have generous repayment terms of a maximum30 year terms. Ability to repay will be based on 2018/2019 tax returns. Applications for the loan can be made up to 9 months after disaster, and funds are being released as early as April 1. https://disasterloan.sba.gov/ela
In addition, business owners should contact their lenders for additional assistance. Some banks are waiving credit card payments on bank issued credit cards, granting forbearance on existing loans, mortgages, and other loans.
For assistance on navigating the process, please contact me at [email protected].