COVID-19: What Every Small Business Needs to Know

A Whole New World for Small Businesses

The current global pandemic caused by COVID-19 is affecting hundreds of thousands of people. It is also having a growing impact on the worldwide economy that is being felt most acutely by small businesses. 

At Funding Circle, we’re here to help. Keep reading for tips and resources to help you stay informed. Continue to visit our Resource Center for relevant news, information and data.

Legislative Measures

What We Are Doing

Our priority is to get capital to small businesses as quickly and safely as possible. Here’s what we are doing at the federal level to make that happen.

Funding Circle is working diligently with the U.S. Government to understand what we can do during this unprecedented time and what exactly we can provide to the small business community. Our goal is to work through this to keep our borrowers safe and healthy, both physically and financially. 

Below is the most recent information on three options for emergency sources of capital available to you:

Available now through the Small Business Administration (SBA):

1. Economic Injury Disaster Loan (EIDL)
2. Economic Injury Disaster Grant

Funding Circle, the largest small business lending fintech is one of a few non-depository online lenders in the United States that was recently approved to provide Paycheck Protection Program loans. We offer the PPP application in four languages: English, Spanish, Mandarin and Hindi. 

Paycheck Protection Program (PPP), is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

Economic Injury Disaster Loan (EIDL) Overview

Small business owners may apply on the Small Business Administration (SBA) website for an Economic Injury Disaster Loan (EIDL) up to $2 million. An overview of loan criteria is below: 

• Loan amount up to $2 million. 
• The term is up to 30 years.
• Interest Rates are 3.75% for small business and (2.75% for non-profits). 
• The first month’s payments are deferred a full year from the date of the promissory note.
• The SBA may approve EIDLS based solely on an applicant’s credit score (no repayment ability and no tax return is required). 
• Prior bankruptcy does not disqualify you.
• EIDLS smaller than $200,000 may be approved without a personal guarantee. 
• SBA is also not requiring real estate as collateral and will accept a general security interest in business property.

Economic Injury Disaster Loan Eligibility

In addition to the entities that are already eligible for SBA disaster loans (small businesses, private non-profits, and small agriculture cooperatives), eligibility is temporarily expanded to include:

• Business entities with 500 or fewer employees.
• Sole proprietorships, with or without employees.
• Independent contractors.
• Cooperatives and employee owned businesses.
• Tribal small businesses.
• Private non-profits of any size.

Additionally, you must have been in business as of January 31, 2020. Expanded eligibility criteria and the emergency grants are only available between January 31, 2020, and December 31, 2020.

How to Apply for a Economic Injury Disaster Loan (EIDL)

• You apply for an EIDL are online with the SBA.
• When you apply, you can request an emergency grant of $10,000.
• The CARES Act stipulates the SBA will provide the grant within 3 days of receiving your application.
• You will not have to repay the grant, even if your application for a loan is denied.
• You can visit an SBA resource partner who can help guide you through the loan application process. You can find your nearest Small Business Development Center (SBDC) or Women’s Business Center here: https://www.sba.gov/local-assistance

Economic Injury Disaster Grant

As part of the Economic Injury Disaster Loan application process, you may qualify to receive a one time grant up to $10,000. More details of this program are below. 

• When you apply, you can request an emergency grant of up to $10,000 in which the SBA will provide the grant as soon as three days after receiving your application.
• Customers may receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss.
• You will not have to repay the grant, even if your application for a loan is denied.

Funding Circle recommends applying as soon as possible for the grant because Congress only allocated $10 billion for this program and it is first come first serve.

Paycheck Protection Program (PPP)

Funding Circle, the largest small business lending fintech is one of a few non-depository online lenders in the United States that was recently approved to provide Paycheck Protection Program loans. We offer the PPP application in four languages: English, Spanish, Mandarin and Hindi. The Paycheck Protection Program (PPP) will serve as an extension of the Small Business Administration (SBA) 7(a) loan program, allowing small businesses to apply for federally guaranteed, forgivable loans. Preliminary details for this program are found below (subject to change):

• 1% interest rate.
• Maturity of 2 years.
• First payment deferred for six months.
• 100% guarantee by SBA.
• No collateral.
• No personal guarantees.
• No borrower or lender fees payable to SBA.
• Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs).
• Payroll costs are capped at $100,000 on an annualized basis for each employee.
• Application through Funding Circle. 

Paycheck Protection Program (PPP) Eligibility

• All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail). 
• Apply through Funding Circle until June 30, 2020 (subject to SBA approval, Funding Circle and our partners will start processing these applications). 

Can I apply for both the Economic Injury Disaster Loan (EIDL), Grant and the Paycheck Protection Program (PPP) loan? 

Yes. If you apply for an Economic Injury Disaster Loan (EIDL) through the SBA, you can also apply for a Paycheck Protection Program loan through Funding Circle (subject to SBA approval, Funding Circle and our partners will start processing these applications). However, the amount forgiven under a Paycheck Protection Program will be decreased by any EIDL grant you receive. 

Additional Information

For more information about SBA loan programs, please visit the Small Business Administration website. 

To get on the advanced application list for the Paycheck Protection Plan (PPP), please visit fundingcircle.com/us/appy. Funding Circle will start processing these applications (subject to SBA approval, Funding Circle and our partners will start processing these applications).

Assistance Programs by State

Please find the complete list of government programs below

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• West Virginia
• Wisconsin
• Wyoming

Miscellaneous Assistance Programs

• Facebook Small Business Grants Program
• #smallbizrelief from Intuit & GoFundMe
• SupportRestaurants.org
• HelpMainStreet.com
• COVID-19 Resources for Artists and Arts Organizations

What You Can Do

While health and government officials are working together to maintain the safety, security, and health of the American people, small businesses are encouraged to do their part to keep their employees, customers, and themselves healthy. We are sharing this guidance from the Small Business Administration with you in hopes it will help you protect yourself, your employees, your customers, and your business: 

• Actively encourage sick employees to stay home
• Separate sick employees
• Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
• Perform routine environmental cleaning
• Advise employees before traveling to take specific steps

• Check the CDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from designated countries with risk of community spread of Coronavirus, and information for aircrew, can be found on the CDC website.

Additional Measures in Response to Currently Occurring Sporadic Importations of the COVID-19:

• Employees who are well but who have a sick family member at home with COVID-19 should notify their supervisor and refer to CDC guidance for how to conduct a risk assessment of their potential exposure.

• If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for how to conduct a risk assessment of their potential exposure.

Common Issues Small Businesses May Encounter:

• Capital Access – Incidents can strain a small business’s financial capacity to make payroll, maintain inventory, and respond to market fluctuations (both sudden drops and surges in demand). Businesses should prepare by exploring and testing their capital access options, so they have what they need when they need it. 

• Workforce Capacity – Incidents have just as much impact on your workers as they do your clientele. It’s critical to ensure they can fulfill their duties while protected.

• Inventory and Supply Chain Shortfalls – While the possibility could be remote, it is a prudent preparedness measure to ensure you have either adequate supplies of stock for a sustained period and/or diversify your distributor sources in the event one supplier cannot meet an order request.

• Facility Remediation/Clean-up Costs – There may be a need to enhance the protection of customers and staff by increasing the frequency and intensity by which your business conducts cleaning of surfaces frequently touched by occupants and visitors. Check your maintenance contracts and supplies of cleaning materials to ensure they can meet increases in demand.

• Insurance Coverage Issues – Many businesses have business interruption insurance; Now is the time to contact your insurance agent to review your policy to precisely understand your coverage in the event of an extended incident.

• Changing Market Demand – There may be access controls or movement restrictions established, which can impede your customers from reaching your business. Additionally, there may be public concerns about public exposure to an incident, and they may decide not to go to your business out of apprehension they may be exposing themselves to greater risk. SBA’s Resources Partners and District Offices have trained experts who can help you craft a plan specific to your situation to help navigate any rapid changes in demand.

• Marketing – It’s critical to communicate openly with your customers about the status of your operations, what protective measures you’ve implemented, and how they (as customers) will be protected when they visit your business. Promotions may also help incentivize customers who may be reluctant to patronize your business.

• Plan – As a business, bring your staff together and prepare a plan for what you will do if the incident worsens or improves. It’s also helpful to conduct a tabletop exercise to simulate potential scenarios and how your business management and staff might respond to the hypothetical situation in this activity. For examples of tabletop exercises, visit FEMA’s website at: https://www.fema.gov/emergency-planning-exercises

Recommended Reading & Helpful Tools

Here’s how to get a small business loan under the $349 billion coronavirus aid bill

by Aaron Gregg, The Washington Post, 3/30/20

“The program is designed to get cash in the hands of suffering small businesses quickly, with less red tape and fewer guardrails than the SBA’s existing loan programs. It is designed to incentivize business owners to keep employees on payroll by offering them loan forgiveness.”

The Brief: This informative article includes an in-depth Q&A on the new Paycheck Protection Program. These loans will apply to costs incurred retroactive between February 15, 2020 to June 30, 2020 with a maximum interest rate of 1%. The SBA has a network of 1,800 approved lenders to process these new loans (Please note: Once the SBA has decided all the details in the next week or so Funding Circle will be offering these loans).

Here’s How To Save Small Businesses And #KeepSmallStrong

by Amy Blaschka, Forbes, 3/30/20

“According to the National Federation of Independent Businesses (NFIB), 76% of small businesses are negatively impacted by the outbreak of the coronavirus, a dramatic escalation from just under one-quarter of small businesses reporting the same earlier this month.”

The Brief: Many larger companies are mobilizing to help small businesses with digital marketing and digitizing their businesses to keep up with changing consumer behavior. Collectives like #keepsmallstrong, and you can apply to join here. 

COVID-19: Ad credits for Google Ads Small and Medium-sized Businesses– 3/31/2020

Think with Google: Your digital marketing toolbox– 3/31/2020

The Brief: Google is providing free ad credits for “small and medium businesses, who advertise directly with [them] or through partners, around the world with active accounts since the beginning of 2019.” 
Think with Google is a free digital toolbox to help small-to-medium businesses discover market trends and get consumer insights.

Links to Relevant Resource Center Articles

We’ve put together a dedicated COVID-19 section on our Resource Center. We’ll continue to update this section with more updates and helpful articles.

• Paycheck Protection Loan Calculator
• Answered: Where Can My Small Business Get Help From COVID-19?
• COVID-19: How Small Businesses Can Find Immediate Support
• 5 Deceptive Financial Practices To Watch During COVID-19
• How Does the Paycheck Protection Plan Work

Quick list of ‘Manage My Loan FAQs

Is there a prepayment penalty or fee?

No, we won’t charge you extra to pay your loan off early. Plus, you only have to pay interest for the time you borrow — so if you pay it off early, you pay less.

If I make a manual payment before my automatic payment, will my automatic payment also go through?

Yes, we will continue to process your automatic payments every month unless you specifically ask us to stop them. Please let us know of any changes at least 5 days in advance of your automated payment date in order for the change to be updated in our system. You can still make a manual payment, but it will be in addition to the automatic payments.

How do I make an additional payment?

You can make an additional payment at any time by calling and requesting a one-time electronic transfer. Please note that we are unable to accept multiple daily electronic transfer payments. You may also be able to set up one-time or recurring wire transfers or check payments from your bank account, although some banks may charge a fee for this service. Additionally, if you’d prefer, you can make additional payments by mailed check.

You may use these processes to break up your monthly payments into multiple, smaller payments. However, be sure that the full monthly payment amount is received by the due date to avoid late fees.

Where can I find my payment history and current loan balance?

You can view your payment history and current loan balance by logging into your dashboard. Unfortunately, we cannot yet accept payments in the dashboard. You can also contact us with any questions, including inquiries about your payment history and current loan balance, at loanquestions@fundingcircle.com or (866) 679-7966.

What if there is an issue with my statement?

If you think there’s an issue with your statement, we want to help correct it right away. Please email or call us at loanquestions@fundingcircle.com or (866) 679-7966.

What should I do if I think I’m going to miss a payment?

If at any time you believe that you may not be able to make one or more repayments, please contact us immediately.

If you miss a payment or only partially pay the amount due, we (or an agent acting on our behalf) will contact you and ask you to explain why and will attempt to collect the payment. If you’re unable to make the payment, your account will be overdue. If your monthly payment is more than 10 days late, we may charge a late fee of up to 5% of the payment amount. The late fee will be payable immediately and is in addition to the missed payment.

Save in exceptional circumstances (such circumstances being deemed exceptional by Funding Circle in its absolute discretion from time to time), if you miss, fail to pay or only partially pay, three or more consecutive monthly installments or four out of six consecutive monthly installments, or if you otherwise fail to comply with any term or condition of the loan agreements, the loan may be placed into default. We will notify you of the default, and our intent to collect all amounts owed from the business and, if necessary, the personal guarantor(s).

If your loan is placed into default we may charge fees to cover tracing charges, field agents’ costs, litigation costs, expenses and other such third party fees incurred by Funding Circle in the course of protecting the interests of the investors who lent to the business.

Is there a late fee for missed payments?

If your monthly payment is more than 10 days late, we may charge a late fee of up to 5% of each missed payment amount. The late fee will be payable immediately and is in addition to the missed payment.

For a full list of FAQs, please see HERE.

Stay Safe and Be Well

At Funding Circle, our goal is to help small businesses like yours grow, create jobs, support local communities, and drive the economy forward. If you are currently a Funding Circle customer, please reach out to us at 1-866-679-7966 or email us at loanquestions@fundingcircle.com. If you are new to exploring Funding Circle, welcome!

We can connect you to Paycheck Protection Program loans offered through the SBA. Subject to government approval, Funding Circle and our partners will start processing these applications (subject to SBA approval, Funding Circle and our partners will start processing these applications). Register to secure your spot in line now. CLICK HERE.

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