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Small Businesses Association Funding Information

The Latest: SBA Disaster Recovery Loans Available Soon for COVID-19

The Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (H.R. 6074) expanded the Small Business Act’s definition of a disaster to include Coronavirus (COVID-19).  As a result, the U.S. Small Business Association (SBA) will be able to provide Economic Injury Disaster Loans (EIDLs) under a Governor’s Certification Disaster Declaration.

Yesterday, Governor Gretchen Whitmer formally requested the SBA to issue an Economic Injury Disaster declaration for the state. Once approved by the SBA, $1 billion in low-interest loans will become available to small businesses, small agricultural cooperatives, and nonprofits that have suffered substantial economic losses as a result of the COVID-19 pandemic. An SBA Economic Injury Disaster declaration will make disaster loans of up to $2 million available to small businesses to help overcome the temporary loss of revenue they are experiencing. We expect the declaration to be approved within the next 24 hours.

Key Economic Injury Disaster Loan Details to Know: 

  • Unlike regular SBA loans, these are direct SBA loans to businesses.  (Regular SBA loans are private bank loans (re: via Wells Fargo), but are then guaranteed by SBA.)  Direct SBA loans can be processed much faster.
  • Loans can be used for general operations…so useful to maintain operations during a downturn such as now.
  • Max loan amount:  $2 million with an interest rate of  3.75% with a max loan length of30 yrs.
  • No payment(s) required for the first year of the loan (but interest charges will start accruing)

The SBA now has authority for a nationwide disaster – something that has never before been granted for a virus or illness. States must opt-in this disaster declaration in order for their businesses to be eligible for the loan program. Information on this is in Lansing and the Chamber, Small Business Association of Michigan, and other partner organizations are advocating for this on behalf of our members.

In the interim, small businesses that could benefit from SBA loans are encouraged to start collecting the information they’ll need to complete and submit their application. Examples of information needed can be found here. It is also helpful for small businesses to contact the Michigan SBA Office to speak to the hardship they’re facing as SBA can then use this to expedite the data gathering process. For additional information or to obtain help preparing the loan application in advance of the declaration, please contact the Michigan SBA offices in Detroit or Grand Rapids.

The Michigan Economic Development Corporation’s (MEDC) call center stands ready to support businesses looking for assistance through other available state programs. For more information, visit MEDC’s website or call 888.522.0103. The Michigan Small Business Development Center can also provide resources for small businesses impacted by COVID-19. Visit their website for additional information.

 

Small Business Taxes

Today, the Michigan Department of Treasury announced that small businesses that have experienced disrupted operations due to the COVID-19 pandemic now have additional time to make their sales, use and withholding tax monthly payment.

Effective immediately, small businesses scheduled to make their monthly sales, use and withholding tax payments on March 20 can postpone filing and payment requirements until April 20. The state Treasury Department will waive all penalties and interest for 30 days.

Specific information about Treasury providing tax assistance to small businesses due to COVID-19 can be found in SUW Penalty and Interest Waiver Notice.

Treasury: Small Business Taxpayers Provided Tax Assistance

Small businesses that have experienced disrupted operations due to the COVID-19 pandemic now have additional time to make their sales, use and withholding tax monthly payment, according to the Michigan Department of Treasury.

Effective immediately, small businesses scheduled to make their monthly sales, use and withholding tax payments on March 20 can postpone filing and payment requirements until April 20. The state Treasury Department will waive all penalties and interest for 30 days. Read more. 

TechTown launches emergency fund for Detroit small businesses

TechTown is launching the Detroit Small Business Stabilization Fund to support the needs of small businesses impacted by COVID-19. In an effort to accelerate access to capital for Detroit’s most vulnerable businesses, TechTown — in partnership with the City of Detroit, the Detroit Economic Growth Corporation (DEGC), and Invest Detroit — will administer working capital grants in amounts of up to $5,000 to qualifying small businesses.
TechTown is raising $250,000 for the fund to ensure that eligible applicants are supported as they navigate challenging times. The fund is part of a layered strategy that includes a continuum of support for businesses. It is modeled after a similar initiative recently launched in Seattle. Application instructions will be made available later this week at techtowndetroit.org. Donations to the fund can be made here.

The Detroit Regional Chamber has started compiling information for a COVID-19 business resource center, explore the latest updates and resources available, including small business resources.

For any questions, please contact Devon O’Reilly at doreilly@detroitchamber.com.