Emergency Loans and Coronavirus Relief for Small Business

Updated May 5, 2021. The coronavirus (COVID-19) pandemic is a developing situation. More resources will be added here as they become available.

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Small business loan resources

The coronavirus pandemic continues to create uncertainty for small businesses. But help is available, including two new grant programs, one for restaurant owners and another for operators of event venues, museums and more.

Apply for federal aid

Several small business loans for coronavirus relief are available at the federal level to help small and medium-sized businesses keep employees on the payroll and meet ongoing financial obligations.

Paycheck Protection Program (PPP)

In the American Rescue Plan Act, Congress added $7.25 billion to the program but kept the existing deadline of March 31, 2021. Just days before the expiration, Congress extended the deadline to May 31, 2021, and gave the U.S. Small Business Administration (SBA) an additional month to process all applications. Read more.


Yes, but you should act quickly. Funding has been exhausted through many lenders including banks. You may be able to obtain a PPP loan from a Community Development Financial Institution (CDFI) before the May 31 deadline. As a reminder, PPP loans are available up to $10 million for first-time applicants. Second-time draws are allowed with a couple of restrictions:

  • Businesses with 300 or fewer employees that can demonstrate at least a 25% reduction in gross receipts
  • Loans are capped at $2 million

The PPP loan forgiveness process works the same way for first- and second-draw loans: In order to receive full forgiveness, you’ll need to spend at least 60% of the funds on payroll and the remaining 40% on other eligible costs, such as certain mortgage, rent or utilities. Expenses related to the pandemic may also be eligible, such as personal protective equipment for you and your workers; supplier costs; operations expenditures; and property damage as result of civil unrest. A simplified forgiveness application will be available for those who borrow $150,000 or less.

Borrowers with loans exceeding $2 million may be subject to an audit to prove the necessity of the loan. The SBA has granted a safe harbor to borrowers with loans of $2 million or less. If you rejected or returned a PPP loan before the safe harbor was put in place, you might be able to reapply or receive your original loan amount.

You can call the SBA’s Office of Inspector General if you suspect misuse of PPP loan funds. Instances of PPP loan fraud could include inflating payroll costs or employee headcount to avoid repayment. For example, employers may report bringing back full-time workers without paying them for their work. Keep in mind the office may be slow to respond, as most employment-related agencies are handling a higher volume of traffic than usual.

COVID-19 Economic Injury Disaster Loans (EIDLs)

The American Rescue Plan Act injected $15 billion into the Targeted EIDL Advance, with grants up to $10,000. The advance is money that can be used for a variety of business uses and does not need to be repaid. But the remainder of the EIDL will need to be repaid with interest. Unlike the PPP, the EIDL is open through the end of the year. Read more.


The Targeted EIDL Advance is open to businesses:

  • With 300 or fewer employees
  • In a low-income community, as defined by the Internal Revenue Code
  • That suffered an economic loss of 30% or more.


In the American Rescue Plan Act, Congress set aside $5 billion of the total $15 billion for smaller and harder-hit businesses:

  • With 10 or fewer employees
  • That suffered an economic loss of 50% or more.

Yes, the SBA continues to process COVID-19 EIDL applications as well as other types of disaster loans.

You can get both an EIDL and a PPP loan for your small business, but you cannot use both loans for the same expenses, such as payroll costs. Find out which may be right for your small business, the EIDL versus PPP loan.

Businesses that receive an EIDL and a PPP loan are no longer required to subtract the advance from their PPP forgiveness amount.  

Restaurant Revitalization Fund

Restaurant owners are big winners in the American Rescue Plan Act, which established a $28.6 billion Restaurant Revitalization Fund that will dole out grants up to $5 million per location. Of the total package, $5 billion will be dedicated to restaurants with gross receipts of $500,000 or less. Read more.

Shuttered Venue Operators Grant

The American Rescue Plan Act added funds to the Shuttered Venue Grants program, which was created by previous legislation. Those who run museums, theaters and live entertainment venues are eligible for up to $10 million. Businesses may apply for a grant in addition to a PPP loan. Read more.

City and state help for small businesses

Several cities and states have unveiled small business loans and resources to support struggling entrepreneurs. Check to see if your city or state has received a Department of Labor grant to help dislocated workers. Here’s a look at what’s offered.

Employers in California can apply for the statewide work-sharing program that provides unemployment insurance benefits to offset layoffs and reduced employee wages. Businesses considering a closure could receive help from the state’s Rapid Response program, which offers immediate on-site assistance to struggling businesses.

Get Help in California

The Denver Economic Development and Opportunity (DEDO) office offers a microloan program to small businesses in the city. Small loans are available between $5,000 and $50,000.

Get Help in Denver

The LA Regional COVID-19 Recovery Fund offers grants of $5,000, $15,000 or $25,000 to small businesses and nonprofits. Microloans and technical assistance are also available through the fund.

Get Help in Los Angeles

The Massachusetts Growth Capital Corporation provides a sector-specific grant program for businesses in need of significant cash relief. Restaurants, bars and other food-related businesses, as well as indoor entertainment venues, are priority recipients. Grants are available up to $75,000, or up to three months of operating expenses based on 2019 tax returns.

Get Help in Massachusetts

The Michigan Economic Development Corporation (MEDC) offers a number of resources for small businesses in the state, including loans from $5,000 to $250,000 through the Metro Community Development program.

Get Help in Michigan

Check with the Department of Economic Development or similar entity in your state to find out what resources may be available to businesses in your area. Your city’s Chamber of Commerce or other regional business organization would provide COVID-19 updates as well.

Help In Other States

SBDCs operate across the country offering business guidance in partnership with the SBA. You could reach out to your local SBDC to find specific COVID-19 resources in your area. Because of the coronavirus pandemic, SBDCs are currently offering online-only services and communication.

Find Your Nearest SBDC

Additional small business relief

Beyond government loans, there are several other sources for aid that small business owners could consider.

  • Online emergency business loans

    Nonbank, online business lenders may be able to provide emergency business loans, sometimes within 24 hours. This is generally a more expensive option than a traditional bank loan, and certainly more expensive than the federal aid we mentioned earlier.

    Learn More

  • Fundraisers for business

    Crowdfunding platforms such as GoFundMe and Indiegogo offer a meeting place for struggling businesses and the customers looking to support them even when storefronts are closed. GoFundMe is offering $500 matching grants to small business owners who raise at least $500 through their own fundraisers on the site, which must be created as part of GoFundMe’s joint relief initiative.

    Learn More

  • Tax relief

    No, it’s not the same as loans or grants replacing lost income, but the federal government has enacted several tax breaks and credits since the start of the coronavirus outbreak. Employers may defer payroll taxes until Dec. 31, 2021. PPP borrowers may now deduct business expenses that were paid for with PPP loan proceeds and take the Employee Retention Tax Credit, which was extended through the end of 2021. If you received an EIDL advance, it does not count as taxable income.

    Learn More

Find support

If you’re having trouble figuring out which relief program can best help your small business, $100 million has been dedicated to a new Community Navigator Pilot Program designed to guide entrepreneurs through the choices. Priority will be placed on helping business owners in disadvantaged communities including women and veterans. Small business development centers, women’s business centers and Service Corps of Retired Executives (SCORE) chapters are eligible for grants to facilitate this work.

Companies that may help

A growing number of companies and organizations have pledged to support small businesses during the coronavirus pandemic.

Kiva, an online lender that also leverages crowdfunding, has expanded its zero-interest loan program up to $15,000.

Opportunity Fund
The nonprofit business microlender is taking donations for its Small Business Relief Fund designed to help affected businesses that are owned by women, immigrants and people of color.

The bank pledged $1 million each to LiftFund and Natural Capital Investment Fund (NCIFund), two community development financial institutions providing grants to small businesses affected by COVID-19.

Restaurant Workers’ Community Foundation (RWCF)
The RWCF has created a COVID-19 relief fund for restaurant owners and employees consisting of donations from the general public.

Help your employees during COVID-19

Employees are the lifeblood of many small businesses, but often staff members must pay the price when business slows down. Here is some guidance for handling employee relations if your business is facing hard times.

Pandemic Unemployment Assistance (PUA)

The new program opens up state-level unemployment benefits to those who are typically not eligible, including self-employed individuals, independent contractors and workers with limited employment history. PUA goes hand in hand with other changes that extend unemployment benefits to Sept. 6, 2021, and gives workers an additional $300 a week. Read more.

Employee loans

If business is going strong but your employees are personally struggling, you may consider lending them money. Read more.

Keep employees safe if your business stays open or reopens

For businesses that are open during the crisis, the Centers for Disease Control and Prevention (CDC) has been promoting best practices for businesses and employers during the coronavirus pandemic. Read more.

Employment FAQs

You can legally reduce the hours of nonexempt hourly employees, as well as their wages, as long as they remain at or above the federal minimum wage. The current federal minimum wage is $7.25 per hour. Nonexempt employees must receive one and one-half times their regular wage for overtime work, including any work they complete at home.

To keep their status as exempt employees, salaried workers must receive their regular pay for their work even if the business is closed. However, employers can direct salaried employees to use vacation time or leave benefits in the event of business closure.

Businesses with more than 100 employees are legally required to provide 60 days’ notice of mass layoffs or business closings. Exceptions to this rule include unforeseeable business circumstances, which could include the spread of the coronavirus. You may need to prove the unforeseen nature of the cause of the layoffs to avoid fines and penalties.

Each state sets its own rules for unemployment insurance, but the benefit is generally designed to provide temporary relief. If you rehire an employee for a full-time role — you must restore your full-time staff to be eligible for PPP loan forgiveness — they become ineligible for unemployment insurance benefits. Part-time employees may remain eligible for pandemic unemployment insurance, as long as their circumstances are related to the COVID-19 outbreak. Employees should contact their state unemployment insurance office to check the status of their benefits.

Your loan forgiveness would not be affected if you offer to rehire an employee who you previously laid off and they reject your offer. You may still be eligible for full loan forgiveness as long as you made a good-faith offer in writing. You would also need to document their refusal to accept the job offer.

Develop a backup plan for your business

  • Pivot to a new business model

    Some companies have been able to use existing operations to make a new product needed during the pandemic. Pivoting during the crisis could include refining or changing your product lineup, targeting a new set of customers, cutting expenses or revamping your revenue model.

    If you haven’t already, working with a business accountant could help you find areas of your business where you could cut back or increase spending to boost the business in new ways. You could also consider reorganizing your accounts payable, which include your bills owed to vendors. Contact suppliers if you anticipate having trouble paying outstanding invoices. Some may be willing to cut you some slack while others might not, and you could prioritize your bills accordingly.

  • Run your business at home

    Depending on the industry you’re in, you could move your business to your home. However, you would have to meet the requirements of your homeowners association or complex, and take precautions if you plan to have customers visit your home.

  • Shutting down your business

    The business interruptions from COVID-19 could force you to close down completely, despite your best efforts. Before closing for good, you’d need to notify your customers, clients and employees as soon as possible and set up a plan to repay creditors. If you have business partners, you may all need to agree to the closure before you can proceed. Corporations and limited liability companies (LLCs) must notify the state in which they were incorporated or formed. Continue reading to learn how to close a business in 7 steps.