Through the Small Business Administration (“SBA”)
Following a request from the governor of the State of Illinois on March 17, 2020, the SBA declared a disaster for the entire state of Illinois and various contiguous counties in Iowa, Indiana, Kentucky, Missouri and Wisconsin.
The declaration makes Illinois businesses impacted as a direct result of COVID-19 eligible to apply for Economic Injury Disaster Loans up to $2,000,000 to help meet financial obligations and operating expenses which could have been met had the disaster not occurred.
Eligibility for the Economic Injury Disaster Loans is based on the actual financial impact from COVID-19. Interest rates are 3.75% for small businesses and 2.75% for non-profit organizations and repayment terms may be up to 30 years to keep payments affordable.
According to the SBA, all businesses, regardless of size (not limited by usual SBA standards), are eligible for disaster loans, along with nonprofits, including charitable organizations, such as churches or private universities.
You can apply for an Apply for Economic Injury Disaster Loans at online at the SBA at https://www.sba.gov (the page also contains links to other COVID-19 resources).
If you have further questions, reach out to your attorney contact at Huck Bouma at 630-221-1755 and we can assist you.
Various state and local financial assistance programs
Various states and local governments have begun offering financial assistance for small businesses suffering from loss of revenue due to the COVID-19 outbreak.
For example, the Illinois Treasurer has established the “Business Invest – Illinois Small Business COVID-19 Relief Program” whereby the State Treasurer is making up to $250 million in state deposits available to financial institutions who agree to provide affordable loans (at interest not to exceed 4.75%) to small businesses and non-profits to be used to provide bridge funding, pay fixed debts, payroll or other bills. Business qualification would be similar to most SBA programs, such as less than $1,000,000 in liquid assets or $8,000,000 in average annual receipts, and for businesses headquartered in Illinois or agreeing to use the funds in Illinois. This is an emerging program.
Participating banks can be found at https://www.illinoistreasurer.gov/financial_institutions/
In addition, the City of Chicago recently announced over $100 million in low interest loans to be provided through a Small Business Resiliency Fund to severely impacted small businesses over the next several months. To qualify, businesses must have fewer than 50 employees. Applications are expected to be taken beginning March 31, 2020. See https://www.chicago.gov/city/en/sites/covid-19/home/chicago-small-business-resiliency-fund.html for further details.
Currently, the Forbes website is publishing a continually updated list of these programs as they become aware of them at https://www.forbes.com/sites/advisor/2020/03/20/list-of-coronavirus-covid-19-small-business-relief-programs/#6b4bbbe6e89d
If you have further questions, reach out to your contact at Huck Bouma and we can assist you.
Bank assistance and forbearance programs
If you have financing with a bank or other financial institution and are having difficulty either making payments or meeting your financial covenants, your bank may be able to offer some forbearance or deferment of obligations. Typically, to get started, you would contact your bank’s relationship manager for your account and let them know in advance what difficulties you are experiencing or anticipating. Generally, it is better to get to your relationship person sooner rather than later, as many businesses will likely be doing the same, and it may take a bit of time for a bank to evaluate what options they are willing to offer.
The American Bankers Association is tracking a list of programs currently offered by various banks at https://www.aba.com/about-us/press-room/industry-response-coronavirus
Depending on your circumstances and relationship with your lender, it could be beneficial for you to reach out to your Huck Bouma attorney contact prior to contacting your lender so we can utilize our experience to evaluate your circumstances and assist you in crafting a proposal to present to your lender.