Resources to Help Fellow Small Business Owners

Dear clients and friends,

Back in 1978 when Bestype opened as a graphic service bureau, my folks had no way of knowing what challenges and achievements would lay ahead. What I do know is that, through it all, they found a way to make it work. As a small business owner, I find my own ability to pivot, respond and stay proactive continually tested by this latest challenge. At the same time, I am invigorated by the care and concern that we are all seeing from one another as New Yorkers in this time of crisis.

With that in mind, we are sharing information on some of the most critical small business relief legislation and programs now available. If you are a fellow small business owner or if you work for, or work with, other small business owners — please use or share this information.

Every single small business needs to take advantage of these programs, and now is the time to do so.

We certainly are, and we encourage you to as well. Together, we can do this. The following is information on the federal CARES ACT programs, followed by details on two programs made available by the New York City Department of Small Business Services:

Congress and the CARES Act

Every small business owner needs to seriously consider how to utilize the CARES Act and its provisions — and this is true whether or not you are currently feeling economic losses relating to the COVID-19 pandemic. There are two primary components:

SBA Economic Impact Disaster Loan (EIDL)

While SBA’s EIDL program predated this situation, the CARES act makes radical changes to open up what was a relatively limited program. Under the new provisions:

• The EIDL program is available nationwide as every part of the country has been declared an eligible disaster area for this program.
• Along with incorporated entities, the self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply
• EIDLs can be approved based solely on credit score without concern for repayment ability or tax return status, nor does a prior bankruptcy disqualify an applicant.
• EIDLs below $200,000 can be approved without a personal guarantee, nor is real estate likely to be required as collateral.
• EIDLs are now accessible without the requirement that credit be unobtainable elsewhere, which means businesses who already have a credit line can still apply.
• EIDL borrowers are in most cases are eligible to receive a $10,000 emergency grant cash advance that can be forgiven if used for payroll, paid leave, or any other applicable business expenses.
• EIDL has no loan fees, guarantee fees or prepayment fees.

Application is directly to the SBA at https://www.sba.gov/funding-programs/disaster-assistance or https://www.sba.gov/disaster-assistance/coronavirus-covid-19

Paycheck Protection Program Loan Guarantee

Where the EIDL program is directly administered by SBA, the new Paycheck Protection Program is being managed through the national network of more than 1,800 SBA-approved lenders. Under this program:

• Applicant businesses should be under 500 employees (with some exceptions).
• Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply.
• Loans are given up to a maximum of the lesser of $10 million, or 2.5 times the average monthly payroll costs – including wages for employees making under $100,000, as well as expenses for paid sick leave, healthcare, etc.
• No personal guarantee or collateral is required for the loan. Payments are deferred up to six to 12 months.
• For this program, loan forgiveness is applicable if funds are used for payroll costs, rent, utilities, group health insurance or other healthcare costs, and some other applicable operating expenses.

There are restrictions associated with changes to workforce size or if you cut employee compensation for those making less than $100,000 per year under certain conditions.

Nonetheless, this essentially amounts to a loan that becomes a grant for most small business owners. We believe every small business should consider applying for one or both of these programs. In fact, you can apply for both types of loans, as long as they cover different expenses.

For more information on how to apply for the Paycheck Protection Program, please visit: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-4

NYC Small Business Services Grant & Loan Programs

The following are details on the city’s current programs, with both grant and loan options presented.

NYC Employee Retention Grant Program

To be eligible, your 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 1-4 employees in total across all locations
• Have been in operation for at least 6 months
• Have no outstanding tax liens or legal judgements

Application link for grant: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program

NYC Small Business Continuity Loan Fund

To be eligible, your 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 fewer in total across all locations
• Demonstrate ability to repay the loan
• Have no outstanding tax liens or legal judgements

Pre-application link for loan: https://www.surveymonkey.com/r/ZL5N8XL

For more information, visit https://www1.nyc.gov/site/sbs/businesses/covid19-business-outreach.page

While I’m certainly no expert on these matters I hope you will find this information useful and that it will point you in the right direction.

From our small business to yours, my very best wishes —
Sincerely,

John Lam
President