A running list of resources for loans and funds for Illinois and Chicago businesses in danger of failing during this crisis. Please let us know what we are missing.
Hopefully we’ll be updating this list soon and often with news of new government programs and available funds meant to stem the tide of the financial crisis caused for the hospitality (and hospitality adjacent) businesses by the epidemic. If we are missing resources and you have them to share, please hit us up through the contact page and we’ll get them posted.
At present, here are resources for you:
1. The SBA Disaster Relief:
What’s this about: You can read our previous piece on the SBA Disaster Relief here. Basically all Illinois small businesses can now apply for low-interest disaster loans to help offset the economic impact of the coronavirus pandemic.
Applying: You can apply online.
Additional Info: There are webinars available to educate on how to apply for this relief: http://sbaillinois.eventbrite.com/
Information you’ll want to collect for your loan application:
- SBA Form 5 or SBA Form 5C for sole proprietorships – SBA loan application
- IRS Form 4506T – Tax Information Authorization for the applicant, principals and affiliates
- Complete copies of the most recent Federal Income Tax Return.
- SBA Form 2202 – Schedule of Liabilities
- SBA Form 413 – Personal Financial Statement
- SBA Form 1368 – Monthly sales figures
- Link here to more information on eligibility
Visit sba.gov/coronavirus for updates on the loan program, guidance for businesses and employers, and other SBA resources.
Need to talk to a small business coach or SBA team member? Visit sba.gov/local-assistance to find a resource near you, or e-mail questions to illinois.do@sba.gov.
2. The State of Illinois Small Business COVID-19 Relief Program:
What’s this about: The state has a relief program running through financial institutions – $250 million to provide economic support to small businesses to help overcome the loss of revenue they are experiencing. The program is not up and running yet, but banks and other financial institutions can apply to be part of the program here.
Where to inquire: for now, the state Treasurer website is maintaining a list of approved program participating institutions you can find it here.
Additional Info: Once up and running, we will update, for now, the details on the program are:
- State funds would be deposited with qualified financial institutions for a 1-year term at a near-zero deposit rate of 0.01% (0.0001).
- Deposits could be drawn in $1 or $5 million increments, up to a maximum of $25 million per financial institution.
- Deposited funds would facilitate affordable loans (not to exceed 4.75%) to small businesses and non-profits that could be used to provide bridge funding, pay fixed debts, payroll, accounts payable and other bills.
- Eligible Illinois businesses or non-profits must: (1) have been shut down or limited due to COVID-19; (2) have less than $1 million in liquid assets or $8 million average annual receipts (per SBA standards); and (3) be headquartered in the state of Illinois or agree to use the funds in Illinois.
- Deposits would be renewable as determined by the Treasurer’s Office.
- Financial institutions would be required to provide reports to the Treasurer’s Office regarding the usage of program funds, including the number and types of loans provided and the economic impact of such loans
Should you have any questions, please contact the Invest In Illinois team at (217) 558-6217, (217) 341-0255 or email investinillinois@illinoistreasurer.gov.
3. The City of Chicago relief fund:
What’s this about: Understanding what was happening to Chicago’s hospitality industry before many, Mayor Lightfoot announced last week that the City was putting together a fund to help Chicago’s Businesses struggling in the Covid-19 crisis for small businesses – under 50 employees/$3 million cap.
Applying: A different process, here is the portal for the City of Chicago’s Resiliency Loan Fund that you can fill out and the City will contact you.
Additional Info: From the City’s portal here is information on the program.
- Repayment Term: Low-interest loans for a term of up to five years.
- Loan Amount: Up to $50,000 but sized based on revenues before the COVID-19 outbreak.
- Loan Proceeds: Proceeds are required to be used for working capital. At least 50% of proceeds should be applied toward payroll and commitment to retain the workforce at 50% of pre-COVID-19 levels.
To be eligible, businesses must meet the following requirements:
- Suffered more than 25% revenue decrease due to COVID-19
- Employ fewer than 50 employees and have gross revenues of less than $3 million in 2019
- Provide a City business address or City business license
- No pre-existing tax liens or legal judgments
4. Illinois Emergency Small Business Grants and Loans Assistance – Hospitality Emergency Grant Program:
What’s this about: Under this program, the State of Illinois’s Department of Commerce and Economic Opportunity will help hospitality businesses in the state with funds from a $14 Million grant program. Grant funds are available to support working capital like payroll and rent, as well as job training, retraining, and technology to support shifts in operations, like increased pick-up and delivery. Bars and restaurants that generated between $500K and $1M in revenue in 2019 are eligible for up to $25,000, and bars and restaurants that generated less than $500K in revenue in 2019 are eligible for up to $10,000. Hotels that generated less than $8M in revenue in 2019 are eligible for up to $50,000.
Applying: Deadline to get in is April 1 so apply NOW! Businesses can submit an application online here: Landing Page, English Application, Spanish Application.
Additional Info: You can read more about the program here along with information about notification times (shooting for April 4 to notify those who will receive grants – must apply by April 1).
5. Illinois Emergency Small Business Grants and Loans Assistance – Illinois Small Business Emergency Loan Fund:
What’s this about: DCEO and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000. Businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 will be eligible to apply. Successful applicants will owe nothing for six months and will then begin making fixed payments at a below market interest rate for the remainder of a five-year loan term.
Applying: Businesses will be able to express interest by March 27, here is the page and link to do that.
Additional Info: You can read more about the program here. Eligible businesses will be invited to submit a full application beginning on April 1. DCEO promises that they will strive to make a loan decision within 10 days, and make funds available within two days of receiving bank information from a business.
6. Illinois Emergency Small Business Grants and Loans Assistance – Downstate Small Business Stabilization Program:
What’s this about: To support small businesses in downstate and rural counties across Illinois, DCEO is repurposing $20 million in CDBG funds to stand up the Downstate Small Business Stabilization Program. This Fund will offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to $25,000 in working capital. These grants will be offered on a rolling basis.
Applying: Businesses were promised that they would be able to apply by March 27. But no link has been posted about that program. When it is, it is likely the link to apply will be posted here.
Additional Info: You can read more about the program here along with information about ineligible communities. Communities receiving an annual allocation directly from HUD on an entitlement (formula) basis are not eligible to apply for the State’s CDBG funding. In 2019, Illinois had 33 metropolitan cities and eight urban counties named as Entitlements. They are:
7. Coronavirus Aid, Relief, and Economic Security Act – CARES Act SBA Loan program:
What’s this about: Providing 100% Federally backed loans to businesses to pay operational costs like payroll, rent, health benefits, insurance premiums, utilities, etc. Subject to certain conditions, loan amounts are forgivable. Lenders authorized to make loans under SBA’s current Business Loan Program are approved to make and approve loans under this new program. Treasury Secretary may extend authority to participate to other private lenders. No collateral or personal guarantee is to be required. Interest rate is not to exceed 4%. No recourse against individual, shareholder, member or partner of loan recipient for non-payment unless the individual uses loan proceeds for unauthorized purposes. Loan’s programs qualify for the broader CARES Act loan forgiveness – indebtedness is forgiven (not to exceed the principal) for payroll, interest or mortgages, rent, and utility payments. Forgiveness will be reduced for any employee cuts or ructions in wages. You will need to keep records verifying full time employees and eligible payments.
Applying: TBD – likely https://www.sba.gov/
Additional Info: Loans made under Disaster Relief Program (see #1 above) can be refinanced as part of a covered loan under this program. Small business concerns are eligible as are businesses and NFPs that less than 500 employees (or a greater amount set by administration for the industry you are in). There is unique “hospitality and dining industry” rule of less than 500 employees per location for businesses with more than one location and is assigned to the “accommodation and food services sector” under NAICS classification. Most loans will be capped at 2.5 times monthly payroll plus the amount of any loans under the Disaster relief program. Funds need to be used to retain workers and maintain payroll or make mortgage, lease and utility payments. Excludes employee compensation over $100k per year (pro-rated).
The reduction in forgiveness for wage reductions is a straight formula for reductions more than 25% of the employees salary/wages.
The reduction formula for fewer employees is:
1.The maximum available forgiveness under the rules described above multiplied by:
2.Average number of full-time equivalent employees (FTEEs) per month – calculated by the average number of FTEEs for each pay period falling within a month – during the covered period divided by:
Either (at election of the borrower) –
•Average number of FTEEs per month employed from February 15, 2019 to June 30, 2019; or
•Average number of FTEEs per month employed from January 1, 2020 until February 29, 2020;
Or, for seasonal employers –
•Average number of FTEEs per month employed from February 15, 2019 until June 30, 2019.
There is relief for employers that rehire employee or make up for wage reductions by June 30, 2020.
8. Coronavirus Aid, Relief, and Economic Security Act – Existing SBA Loan participant relief:
What’s this about: Congress is looking to encourage lenders in SBA programs to provide payment deferments or extend the maturity of SBA loans so as to avoid balloon payments or increases in debt payments that would result from deferment.
Applying: TBD – likely https://www.sba.gov/
Additional Info: Includes extension of site visit requirements.
9. Coronavirus Aid, Relief, and Economic Security Act – Employee Retention Credit; delay of Payroll Taxes; Tax Cuts and Jobs Act losses changes:
What’s this about: Provides eligible employers a refundable credit against payroll tax liability equal to 50% of the first $10,000 in wages per employee. Must have business operations fully or partially suspended due to orders from government entity limiting travel/commerce/meetings, or experience a year over year reduction in gross receipts of at least 50% until gross receipts exceed 80% year over year. (For those with over 100 full-time employees, only employees who are not providing services for the employer due to COVID-19 causes are eligible. For payroll taxes the CARES Act postpones the due date for depositing employer payroll taxes and makes them payable over the next two years.
Applying: Will request/apply with taxes/payments.
Additional Info: Credit is effective March 12, 2020 through January 1, 2021 other provisions take place over set times.
10. Coronavirus Aid, Relief, and Economic Security Act – Treasury Loan programs:
What’s this about: The act gives the Treasury broad discretion and funds for creating loans for USA businesses (domiciled and hiring/employing citizens). The Federal reserve is encouraged to establish a facility to support lending to small and mid-sized businesses (Main Street Lending Program), and non-profit lending programs are encouraged.
Applying: TBD – likely https://home.treasury.gov/ & https://www.federalreserve.gov/
Additional Info: Credit is effective March 12, 2020 through January 1, 2021 other provisions take place over set times.
