How Your Business Can Receive Aid From the $2 Trillion Stimulus Package

Published by Kenny Schumacher on April 02, 2020

COVID-19 has had a profound affect on all businesses and has made times tough for most. If you live in the US, the US government has created some amazing initiatives to give your business cash.

Did you know any US small businesses can apply for a $10,000 loan by the government that can be made available in just 3 days? On top of that, it's 100% forgivable, meaning that if you don't repay it, there aren't any consequences as long as it's used to help your business.

You can obtain this by applying for a COVID-19 Economic Injury Disaster Loan. It only takes a few minutes and is free money for your business.

On top of this $10,000 in free money, the US government has provided additional special initiatives to provide your business with much needed capital - potentially up to $10,000,000.

In this article, we'll cover everything you need to know for your business to actually take advantage of this money.



CARES Act


The unprecedented response to the COVID-19 pandemic has prioritized keeping people apart to slow the spread of the virus. While measures such as business closures and travel restrictions are effective at fighting a pandemic, they also have a dramatic impact on the economy.

To help right the ship, the Coronavirus Aid, Relief, and Economic Security Act — also known as the CARES Act — was passed by U.S. lawmakers last week with little fanfare. The act became the largest economic stimulus bill in modern history, more than doubling the stimulus act passed in 2009 during the Financial Crisis.



How can your business receive aid from this stimulus package?


To apply for the $10,000 loan that is completely forgiveable, simply apply on the SBA website. It takes only a few minutes to complete the application.

In addition to the $10,000 loan, which acts essentially as a grant, the government is offering the lesser of 2.5x average payroll incurred over the last 12 months or $10M, whichever is less and that loan forgiveness will be available for up to 8 weeks of payroll cost, as long as you use the funds for the approved purposes. This means that as long as you are appropriately using the funds, there is no need to repay them.

The main features for small businesses are emergency grants and a forgivable loan program for companies with 500 or fewer employees. There are also changes to rules for expenses and deductions meant to make it easier for companies to keep employees on the payroll and stay open in the near-term.

The government hasn't provided much information on this larger loan, however it is set to be in effect starting April 3, 2020.



What you need to know about the stimulus package


  • Applications open for small businesses and sole proprietorships on April 3rd. Independent contractors and self-employed individuals can apply, starting April 10th.
  • All FDIC insured banks will be able to extend these loans, but only to the extent that they have the capacity.
  • If you were in business on Feb 15th, employ less than 500 employees, and have been affected by COVID-19, you are eligible for a small business loan. There is still a lot of unknowns on the practicality of how these loans will work, but bankers are gearing up for what will be a flood of applications.
  • More frequently asked questions were answered here.


What should you prepare?


  1. Most recently filed tax return
  2. EIN documentation (proving you were in business prior to Feb. 15)
  3. Payroll reports (proving you had employees prior to Feb 15th and their pay rates)
  4. Payroll tax forms
  5. Proof of rent, utility, and health care costs in the form of receipts/invoices.


How much can you borrow?


Small business owners are eligible to secure up to 2.5x their average monthly payroll costs for the period of Feb 15, 2019 – Jun 30, 2019. Loan amounts might vary based on how the bank calculates eligible payroll costs and there is a $10 million cap on the loan amount you are eligible for.

It's best to contact your bank to discuss this and be provided with more guidance.



What do I need to do to get started?



  1. Call your bank and make an appointment to discuss loan options
  2. Apply online here for COVID-19 relief – When asked about “Emergency advance”, check the box and enter your bank info. You could qualify for a grant up to $10,000 that does not need to be repaid under any circumstance as long as it's used for eligible costs as discussed below
  3. Amend prior-year tax returns and utilize your NOL balance


Eligibility for loan forgiveness


There is $350 billion allocated for the Small Business Administration to provide loans of up to $10 million per business. Any portion of that loan used to maintain payroll, keep workers on the books or pay for rent, mortgage, and existing debt could be forgiven, provided workers stay employed through the end of June.

The loan can be forgiven only if the funds are used for:


  1. Call your bank and make an appointment to discuss loan options
  2. Apply online here for COVID-19 relief – When asked about “Emergency advance”, check the box and enter your bank info. You could qualify for a grant up to $10,000 that does not need to be repaid under any circumstance as long as it's used for eligible costs as discussed below
  3. Amend prior-year tax returns and utilize your NOL balance

After receiving the funds, an 8-week clock starts to use them on qualifying expenses to keep your business afloat and employees paid. The amount of the loan that is eligible for forgiveness decreases if you end up having to decrease your headcount. 100% of your loan is forgiven to the extent you keep all of your employees employed during the 8-week period.



Conclusion: Stimulus package summary


stimulus package

We understand that everyone is affected by COVID-19. If your business is seriously suffering or may suffer in the near future, this is definitely something you don't want to miss out on. Call your bank, prepare the requirements and make the most out of this stimulus package provided by the government to keep your business afloat at this time of crisis.

Likewise, Delesign wants to help and we will be updating you should we receive further information on the US government's loan programs. If there is anything we can help you or your business with, please do not hesitate to reach out to us and we will be happy to help.


Kenny Schumacher

Kenny Schumacher is the founder of Delesign - a flat rate graphic design service helping hundreds of businesses. When he's not working, he enjoys staying active and playing with his parrot Mango. Connect with him on LinkedIn.