Student Corner: Emergency Funds for Small Businesses

As of April 2020, the full economic impacts of the novel coronavirus (COVID-19) are still unknown. Millions of Americans have filed for unemployment compensation, and non-essential businesses have been forced to close. In the process, small business owners have been left wondering how to meet debt and payroll obligations while revenues continue to decline. Partially in response to these pressures, the federal government has passed a series of bills to promote wide-ranging economic stimulus. In addition to direct cash payments to American households and an expansion of Unemployment Insurance, the stimulus offers greater access to emergency financing to small businesses. Perhaps indicating the severity of the current economic situation, early reports have revealed that the expanded financing available to small businesses has been overwhelmed with applications. According the Small Business Administration (SBA), the CARES Act passed on March 27, 2020, makes $376 billon available to American workers and small businesses. In addition to the SBA’s traditional funding sources, the act establishes four critical categories of temporary funding. As communities across North Carolina grapple with how to best aide their small employers, this post seeks to highlight new and existing financing programs available from the SBA. Paycheck Protection Program Approved under the CARES Act in March, the Paycheck Protection Program provides access to emergency debt funds so that employers can meet payroll obligations and keep their workforce employed. Though structured as a loan, awarded funds will be forgiven if a business keeps its employees on its payroll for eight weeks. Funds can be used for payroll, rent, [...]