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When COVID-19 first broke out, the speculations regarding its economic ramifications were desultory and haphazard. The disease itself was shrouded in mystery and information surrounding its potential impacts was scarce. Countries around the world adopted different policies to combat the devastating effects of the pandemic’s social and economic disruption as the events and circumstances continued to unfold.

One of the US’s economic responses to the COVID-19 pandemic was the CARES Act which was a $2 trillion stimulus bill that was passed by the US Congress and signed by the President on Friday, March 27, 2020. The CARES Act stands for Coronavirus Aid, Relief, and Economic Security and it was designed to alleviate the economic impacts of the COVID-19 and stave off a deep recession as a result of it.

This legislation was crafted to subsidize and support large and small businesses as well as families, individuals, freelancers, contractors, educational institutions, and health facilities. Several loans, grants, and programs were introduced in the CARES Act to provide financial aid for hard-hit small businesses, of which some have been extended until the end of 2021. Below, we quickly discuss each of them and provide details about whether or not you can still apply for them.

Paycheck Protection Program (PPP)

The purpose of this program was to assist small businesses to keep their workers on the payroll and help prevent layoffs. The Eligible businesses could get loans from the Small Business Administration (SBA) through local banks to spend on allowable uses such as payroll costs, rents, utilities, interest on mortgage obligations, business software and cloud services, essential suppliers payments, etc.

The amount of loan that a business could receive was 2.5 multiplied by its average monthly payroll for the 12 months period prior to the application. One of the main benefits of the PPP loan was that its payment could be deferred up to one year and if the loan was used for approved expenses up until 8 weeks following its origination date, it was entirely forgiven. 

In total, the program administered over $798 million loans to around 8.5 million small businesses over three rounds with the last one expiring on March 31, 2021. According to SBA, there will be no fourth round as the funds have been completely exhausted. However, there are other incentives in the CARES Act such as ERTC credit which is still available (until December 31, 2021) and allows eligible employers to get a refundable payroll tax credit equal to a percentage of qualifying wages.

Shuttered Venue Operator Grant Program (SVOG)

SVOG was a $16 billion program created to assist live venue operators such as zoos, museums, and theatres, and several other live preview promoters. Under this program, an eligible organization could receive up to $10 million which would be calculated based on a number of factors such as the date of starting operations.

There was a priority order for the applicants based on the amount of revenue loss they experienced due to the pandemic lockdowns. The grant was allowed to be used for operational expenses such as payrolls, rents, taxes, payments to independent contractors, personal protective equipment, etc.  

After the American Rescue Plan which was signed into law on March 11, 2021, qualified applicants were able to apply for both PPP and SVOG. However, they would be ineligible to receive a PPP loan after receiving an SVOG fund. And those who had previously received a PPP fund would have their PPP loan amount deducted from their SVOG if they were approved. The application window ended August 20, 2021, and the program awarded $8.4 billion to more than 10,800 businesses. 

Economic Injury Disaster Loan Program (EIDL)

EIDL is an ongoing disaster assistance program in which the Small Business Administration offers loans to small business owners who have undergone a severe economic injury due to a disaster identified and declared by the SBA. 

As a part of the CARES Act, the COVID-19 pandemic is recognized as a disaster in all 50 states and small businesses with under 500 employees including solo practitioners and contractors can directly apply through the SBA’s website to get low-interest loans up to $2 million. The good thing about this program is that all loan applicants can request up to $10,000 in advance regardless of whether their application is approved. This amount does not need to be repaid even if the loan is never approved and it can be used for allowable uses. The interest rate for these loans is 3.75% for small businesses and 2.75% for private non-profit organizations.

Unlike regular SBA economic injury loans, COVID-related loans don’t need a personal guarantee provided they are under $200,000 and they also don’t require one-year operation history. However, the business must have been operational as of 31st 2020. While the EIDL program is always available, you have only until December 31 2021 to apply for a COVID-19 Economic Injury Disaster Loan.