Emergency funding options for small businesses (2021 update)

In this 5-minute read:

  • Tips for getting loan assistance quickly
  • Assistance from U.S. Small Business Administration (SBA)
  • Emergency loans you can get from a local bank
  • Other funding sources
  • Relief efforts and free offers during the COVID-19 outbreak

IMPORTANT UPDATE FOR 2021: Congress has approved an extension of the PPP loan program until March 31, 2021, including “second draw” PPP loans for businesses that received PPP funding in 2020. Please click for more details about PPP loans.

During emergencies and times of crisis, it’s hard to predict what kind of effects your business will experience. Will sales drop? Will demand increase? Maybe you’ll have a combination of the two depending on your industry. 

Get your PPP loan or second draw PPP loan through Womply! Womply has helped over 200,000 businesses get their PPP funding. It’s free to apply for a PPP loan, and Womply can help connect you with an SBA lender that’s right for you! Start your PPP application.

With the spreading of novel coronavirus (COVID-19), small businesses all over the world are being disrupted. So, we’ve put together a helpful list of places where you can get emergency funding for your business during your time of need. 

Tips for getting loan assistance quickly

Before getting to our list, we wanted to share some tips that will make the process of acquiring funding a little bit easier (and sometimes quicker), especially when seeking assistance from alternative lenders:

  • Have your statements prepared. Get at least four months of your business’s recent bank and credit card processing statements ready before applying for any loans. 
  • Have paperwork ready to show your business’s annual revenue, debt obligation, cash flow, and profitability. These are the primary factors for loan approval. 
  • Be prepared to state how long you’ve been in business. Most lenders require a minimum business age of 6 months (sometimes up to two years).

woman reviewing business documents for emergency funding

Assistance from U.S. Small Business Administration (SBA)

The United States Small Business Administration is prepared to help during national emergencies and also offers alternative loan and funding programs for businesses that need it. 

SBA Disaster Assistance

Currently, the SBA has disaster assistance in place for businesses that are heavily affected by the impacts of the coronavirus. 

From the SBA: The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

Click to read our helpful walkthrough for applying for SBA disaster loans

How the SBA Disaster Assistance program works:

  • The SBA’s Disaster Assistance will coordinate with state and territory governors to submit and approve requests for Economic Injury Disaster Loan assistance
  • When specific areas have been chosen and approved for this program, the SBA will make this information available to affected communities and update their website: SBA.gov/disaster
  • Economic Injury Disaster loans can be acquired for up to $2 million
  • Loans can be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the impact of the coronavirus
  • Interests rates are 3.75% for small businesses and 2.75% for non-profits
  • Repayment plans can be long-term (for up to 30 years) in order to keep payments affordable

SBA loans and funding programs

Beyond the SBA’s disaster assistance options, they also have the resources to help connect you with other types of lenders when traditional methods aren’t working. This can be helpful if your state or territory doesn’t yet qualify for the disaster relief efforts. 

Whether you need $500 or $5 million, the SBA can help point you to the perfect lender for your business’s needs. 

There are eligibility requirements for loans provided through the SBA (this is different from the Disaster Assistance requirements):

  • Must be a for-profit business
  • Must do business in the U.S.
  • Must have personal equity invested in the business (time or money)
  • Must have exhausted financial options (can’t get loans from other lenders)

Learn more about how to get loans through the SBA’s lender match program at SBA.gov.

Emergency loans and funding from alternative lenders

In emergency situations, you often need capital quicker than traditional lenders (like banks) can get it to you. That’s where alternative lenders come in. These are non-bank companies, like venture capitalists, angel investors, non-profits, and other investment companies that seek to provide funding to small businesses. 

Emergency loan options from alternative lenders:

  • Short-term loans are lump-sum loans that are meant to be paid back within 18 months. These are often quicker to acquire and helpful in a pinch for a one-time unexpected emergency
  • Medium-term loans (or traditional term loans) are the types of loans that you might acquire from a bank with regular payments at a fixed interest rate. But if you can wait a little longer to get your loan from an alternative lender, this might be the way to go. 
  • Invoice financing is helpful when your customers aren’t able to pay their invoices (and if we’re all in the same boat with the impacts of COVID-19, that might be a likely scenario). Invoice financing options will pay a percentage of your unpaid invoices to you quickly, generally 85%, with the other percentage getting paid later. 
  • A merchant credit advance (MCA), while not technically a loan, is a great option for quick cash. With an MCA, a financing company will give you cash in exchange for a percentage of your daily credit and debit card sales, with an additional fee. 

Some national lenders that can help with these types of emergency funding:

  • CAN Capital can help with short-term loans and MCA 
  • Fundation can assist you with medium-term loans
  • BlueVine can help with invoice financing and term loans

Relief efforts and free services during the COVID-19 outbreak

Several organizations are joining in on the relief efforts to help businesses continue to push forward during this time and to minimize the impacts of the coronavirus on the economy. 

Some of these efforts are intended for specific types of businesses, but most businesses can find some aid during this time. (Obviously these “emergency” offers are in constant flux, so we can’t be held responsible if you find they’ve been modified or canceled at some point. Be sure to ask them about any offers.)

Comcast

Comcast is offering free access to its Xfinity Wifi hotspots, for subscribers and non-subscribers, for 60 days. It is also giving its customers unlimited data at no extra charge in an effort to help people stay connected during this time. 

PG&E

Pacific Gas and Electric Company has decided not to shut off utility services (for residential and commercial customers) due to non-payment due to the impacts that COVID-19 is having on consumers and businesses. 

AT&T

AT&T is waiving late fees and service disconnections due to non-payment. And like Comcast, they are also open up their wifi hotspots to the public for free. 

Grubhub

Grubhub is suspending commission payments of up to $100 million from restaurants across the country as more people order online and delivery. They have also made a fund that will allow proceeds to go back toward the delivery drivers and restaurants affected by this crisis. Restaurant customers can opt to round up their change to donate to the Grubhub Community Relief Fund. 

Several other organizations are putting forth efforts just like these in order to help keep the economy moving forward and support their communities during this time of need. Check with local companies to see what efforts they are taking. 

Let Womply help you apply for your PPP loans!

As you know, it’s free to apply for a PPP loan, and we know you have lots of choices. So why should you let Womply connect you with an approved SBA lender? Because we know what we’re doing and people love the help we provide. We’ve helped over 200,000 businesses, contractors, sole proprietors, and self-employed individuals get approved. Don’t wait! The deadline is March 31, 2021.

Start your PPP application now!

Learn more, plus get free reputation monitoring and customer insights when you sign up for Womply Free!

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