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The federal stimulus package for COVID relief was passed to help revitalize the economy after the initial crash. Every American citizen with an income of less than $75,000 has received a $1,200 check. In addition, the package allows for $350 billion in completely forgivable small business loans.

If you’re a small business owner, understanding the package is the first step to using it. Your business may be eligible for a loan, but you need to know how much money to apply for, as well as whether the loan will positively impact your business. These are some basic ways to take advantage of the offered resources and manage them wisely.

The most important step to take first is to organize your business’s information. Once you have a clear picture of your finances, you can determine your eligibility and needs. You can also use this picture as a reference throughout the next steps. For people whose businesses have a financial planner or accountant, it’s important to have them double-check the documentation.

Not all businesses will require the stimulus package. Some businesses can operate remotely without a problem. But for business owners who need to lay off staff and reduce their operations, the loan offers support.

To be eligible for a small business loan, you must meet these requirements:

  • The company employs less than 500 individuals.
  • You have reduced operations or need to lay off your staff.

Non-profits have a slightly lower interest rate than small businesses. The maximum loan that a business may receive is two million dollars.

If this is a loan that’s necessary for you, you can file the application through a local bank. Use your usual bank branch first and ask them ahead of time whether they’ve received any guidance regarding government funding.

The stimulus package has very specific requirements regarding how this money may be spent. It can only be used for covering whatever fixed business costs are not being covered because of the coronavirus impact.

One of the most important aspects of this package is payroll. Small business owners can continue to pay their employees normal wages, which helps to prevent further spikes in unemployment. The loan cannot be used to invest in new ventures or equipment.