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Business Resources and Recovery

April 09, 2020

Businesses grappling with the economic impact of the ongoing COVID-19 crisis have the opportunity to apply for financial assistance through a variety of Federal, State and Local programs.  Our team at Farrell Fritz actively negotiates and secures financial incentive packages for small and medium sized businesses and nonprofit organizations throughout New York State. We stand ready to assist businesses navigating the various government assistance programs that are presently available to leverage and secure eligible financial incentives. Feel free to contact Peter Curry or Nick Terzulli to discuss your situation in greater detail.

SBA Economic Injury Disaster Loan (“EIDL”)

The SBA is offering low-interest federal disaster loans to provide working capital to small businesses suffering substantial economic injury as a result of COVID-19 throughout New York State.

A business can apply to both the PPP and EIDL programs and receive loans under both programs; however, loan proceeds cannot be used for the same purpose. For more details on how the PPP and EIDL programs work together, please contact the COVID-19 Crisis Response Team.

Eligibility Requirements:

  • Business in existence on January 31, 2020;
  • Business with fewer than 500 employees;
  • Cooperatives, ESOPs, and tribal small businesses with fewer than 500 employees;
  • Sole proprietors;
  • Independent contractors;
  • Most private nonprofits;
  • Some businesses with more than 500 employees, but under SBA Size Standards. A size standard, which is usually stated in number of employees or average annual receipts, represents the largest size that a business may be to remain classified as a small business for SBA programs. The definition of “small” varies by industry.  For more information see: https://www.sba.gov/document/support–table-size-standards

Loan Details: 

  • Maximum loan amount: $2 million;
  • 75% fixed interest rate for businesses;
  • 75% fixed interest rate for non-profits;
  • Term: up to 30 years;
  • First payment due one year after origination;
  • Up to $200,000 can be approved without a personal guarantee;
  • Loans approved based on credit scores and no first-year tax returns are required;
  • Borrowers do not need to prove they could not get credit elsewhere;
  • Loans of more than $25,000 require collateral, which can be the general security interest in business assets in lieu of real estate;
  • Loans of $25,000 or less do not require collateral;
  • Borrowers must allow the SBA to review their tax records

Emergency $10,000 Grant: 

  • Eligible EIDL applicants can also receive a $10,000 emergency grant;
  • The grant will made available within a few days of application submission;
  • The applicant is not required to repay the grant, even if they are subsequently denied a loan.

To receive the $10,000 emergency grant, it is not necessary for a business to have an approved EIDL loan.  However, if the business is able to secure a PPP loan the $10,000 grant will be subtracted from the PPP loan forgiveness amount.

To Apply: https://covid19relief.sba.gov/#/

NYC Small Business Continuity Loan Fund

Businesses with fewer than 100 employees that can demonstrate at least a 25% decreased in revenue as a result of COVID-19 can apply for an interest free loan up to $75,000 to help ensure businesses continuity.  Awards are given on a first come, first serve basis.

Eligibility Criteria for the NYC Small Business Continuity Loan Fund

Business must:

  • Be located within the five boroughs of New York City;
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue;
  • Employ 99 employees or less in total across all locations;
  • Demonstrate ability to repay the loan;
  • Have no outstanding tax liens or legal judgments (Business owners who are otherwise eligible and currently on a tax lien payment plan should proceed with the application). 

More information can be found here: https://www1.nyc.gov/nycbusiness/article/nyc-small-business-continuity-loan-program

Privately-Funded Resources

There are a number of privately-funded programs and resources becoming available, sponsored by companies looking to help in the recovery process. Major companies are entering this space and offering other resources for small business. We can help in the identification process of these resources for your business.

Export-Import Bank of the United States (“EXIM”)

EXIM is offering relief measures for exporters and financial institutions located throughout the United States that may have been affected by COVID-19 (coronavirus), including waivers, deadline extensions, streamlined processing, and flexibility, to EXIM customers for an initial period of 30 days (with the possibility of a further extension of the period, at EXIM’s discretion).  Such measures are designed to enable businesses and financial institutions that participate in EXIM programs to return to their business concerns and EXIM-related obligations at an appropriate time without penalty. More information can be found here: https://www.exim.gov/fact-sheet-exim-covid-19-assistance

Small Business Development Centers (“SBDCs”)

Small Business Development Centers, local offices sponsored by the SBA to assist small business owners and entrepreneurs, are available throughout New York to provide technical assistance to businesses during the COVID-19 crisis. More information can be found here: https://americassbdc.org/coronavirus-information/

Empire State Development Corporation (“ESD”)

ESD is New York State’s primary economic development agency and serves as a clearinghouse for all Federal and State COVID-19 economic assistance programs and policies.

ESD published guidance for determining whether a business enterprises is subject to a workforce reduction under recent executive orders. The guidance can be found here:  https://esd.ny.gov/guidance-executive-order-2026.

Essential Business Guidance

Businesses that request a designation as an “essential business” under Executive Order 202.6 can apply through the ESD website here: https://esd.ny.gov/content/request-designation-essential-business-purposes-executive-order-2026.

At this time, there are no direct ESD programs targeted at businesses effected by COVID-19. That may change in the future. More information on ESD can be found here: https://esd.ny.gov/

Industrial Development Agencies (“IDAs”)

IDAs provide property tax, mortgage recording tax, and sales and use tax exemptions to qualifying businesses in New York State. These exemptions are typically tied to growth and expansion; however, after Superstorm Sandy in 2012, the eight (8) IDAs on Long Island created programs to assist businesses effected by the storm. Although the IDAs have not enacted formal policies yet related to COVID-19, large employers may be eligible for tax stabilization programs aimed at ensuring businesses retain their employees

 

*Please be advised, the rapidly changing public health crisis has resulted in frequent changes to the legal and regulatory guidance regarding COVID-19 legislation.  Information contained on this webpage may not constitute the most up-to-date legal or other information. (UPDATED APRIL 9TH)

  • Related Practice Areas: Commercial Finance & Banking, Corporate, Labor & Employment, Not-for-Profit, Real Estate
  • Featured Attorneys: Peter L. Curry, Nicholas T. Terzulli