United States
Updated: June 21st, 2023
Our nation relies on small businesses. Small businesses make up 99.9% of all US companies, employing over 47% of the entire private workforce. That’s why it’s doubly terrifying to see how savagely the COVID-19 pandemic is hitting local businesses.
The country’s economy would collapse without small businesses, which is why the government, non-profits, and enterprise corporations are providing generous coronavirus aid through grants to small business owners in need of financial help. Last year, dozens of grants emerged to help companies stay afloat during the worst of the storm. Now, a few substantial coronavirus grants still remain to get small businesses back on their feet:
Small business grants for COVID-19 are essentially free money given to small business owners to help them survive the impacts of COVID-19. Unlike a loan, grants aren’t paid back, but they often have strict restrictions on how you can spend them.
Because grants are basically free money, they can be incredibly competitive—what small business wouldn’t go head-to-head for free money?
Grant applications take time and preparation, so you’ll want to ensure you spend your time applying for the most beneficial and realistic options.
With so many emergency grants available to small businesses, it’s hard to narrow down the options. You could take a spray-and-pray approach and apply for every eligible grant, but that’d waste valuable time and resources. Instead, we recommend looking at the following top 5 coronavirus grants for small businesses.
When used appropriately, PPP loans can resemble a grant more than a loan. These government-backed loans can grant businesses up to 2.5 times their average monthly payroll costs (with a maximum of $10 million for first-time drawers and $2 million for second-time drawers). Businesses hard-hit—like food and accommodation industries—can borrow up to 3.5 times their average monthly payroll costs.
However, these loans have the potential to be 100% forgivable. If small businesses use the funds appropriately, these loans will be forgiven in their entirety, essentially turning them into government grants.
Small businesses will need to spend at least 60% of the loan on payroll costs to qualify for full forgiveness—the remaining 40% can be spent on rent, protective equipment modifications, mortgage interest, and other qualified expenses.
The SBA’s Office of Disaster Assistance administers SVO grants for eligible venues. Applicants can qualify for up to 45% of their gross earned revenue (with a maximum grant award of $10 million).
Eligible entities will have to have been in operation as of February 29, 2020, and they can’t have received (or applied for) a PPP loan after December 26, 2020. Businesses with greater revenue losses in 2020 will be given first priority at SVO grants.
SVO funds can be used on a variety of expenses:
Like PPP loans, EIDLs are technically loans, but they have grant-like characteristics. EIDLs provide small businesses with up to $2 million in working capital to offset losses caused by the COVID-19 crisis.
Small businesses applying for an EIDL can request an advance (COVID-19 Targeted EIDL Advance) for as much as $10,000. These advances are essentially emergency grants that companies don’t have to repay, even if they’re eventually denied an EIDL.
These advances are reserved for applicants located in low-income communities who received less than $10,000 on their original EIDL Advance or never received funds due to lack of available government funding.
GoFundMe launched the Small Business Relief Fund in March 2020 to support small businesses in need. The program raised over $2.5 million for thousands of qualifying small businesses.
Now, the program is returning to continue issuing grants to hundreds of more businesses. To be eligible for a grant, you’ll need to do the following:
That’s it. This is one of the least intensive grant applications available. The money is relatively small, but so is the required effort. If you have a large following on social media or an engaged email list, the GoFundMe Small Business Relief Fund could be easy coronavirus relief.
Local Initiatives Support Corporation (LISC) is one of the US’ largest social enterprises supporting rural projects and programs to revitalize underserved communities. They launched the Small Business Relief Grant to provide $5,000 to $20,000 grants to rural-based small businesses that COVID-19 has impacted.
These grant funds can be used for operations costs (like rent and utilities), payroll, and vendor debt.
If you have extensive financing needs, you’ll need a more sizable grant. PPP loans are by far the largest government-backed grants you’re going to find, and they’re relatively easy to qualify for. If your business needs money to pay employees, a PPP loan will be your best option.
The US is rallying behind small businesses, so there’s no shortage of options. These are just a taste of the best free coronavirus money you out there, but you can find more company-specific and industry-specific grants available for small businesses.
Don’t wait until you need the cash to start applying. Grant applications can be tedious, so make sure you set aside ample time to complete the process. Remember, these are competitive financing tools, which means you’ll need to bring your A-game to every single grant.
Want to get started on a PPP loan application? Funding Circle is providing first-draw and second-draw PPP loans. Apply now to begin your quick-and-easy application.
Michael Jones is a Senior Editor for Funding Circle, specializing in small business loans. He holds a degree in International Business and Economics from Boston University's Questrom School of Business. Prior to Funding Circle, Michael was the Head of Content for Bond Street, a venture-backed FinTech company specializing in small business loans. He has written extensively about small business loans, entrepreneurship, and marketing.
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