Where Illinois small businesses can get government financial help

Where Illinois small businesses can get government financial help

The federal government authorized a financial aid program for small businesses that have closed their doors due to the COVID-19 pandemic, but state and local government also offer assistance.

Small businesses around the nation are struggling as many have closed to adhere to social distancing guidelines to stop the spread of COVID-19. In Illinois, it has been especially difficult as the state was one of the first to implement a stay-at-home order.

However, small businesses of all types are eligible for relief through loan programs passed by Congress and at the state and local level. Here is a guide.

Federal assistance

Paycheck Protection Program

  • Authorized by Congress to give small businesses loans to pay their bills and employees
  • Small Business Administration opened access to $349 billion of loans.
  • For businesses with fewer than 500 employees and that were established by Feb. 15
  • The loan is forgivable up to 250% of a business’s monthly payroll costs, capped at $10 million
  • Businesses do not have to show creditworthiness to apply
  • Money used for eight weeks of expenses can be kept as long as the business can produce a receipt showing it was used for payroll, health care, interest on mortgages and bills for rent or utilities
  • Payments on the loan used for other purposes can be deferred for up to six months
  • The loan has a maximum interest rate of 1% and maturity of two years
  • Businesses can rehire employees and use the loan to cover the cost of their paychecks

Also in the works is a $4 trillion lending program set up by the Federal Reserve and U.S. Treasury Department. The program was made possible because $454 billion appropriated by Congress can be multiplied many times as loans as a result of most of them eventually being repaid.

Payroll tax credit

  • Employers who are shuttered by government order or see a 50% loss compared to the previous year are eligible for a payroll tax credit if they do not accept a loan under the Paycheck Protection Program
  • This is a 50% tax credit for wages up to $5,000 per employee
  • It applies to wages between March 13 and December 31, 2020

Employers are also eligible to receive payroll tax credits for sick leave benefits to workers who are sick from or idled as a result of the coronavirus.

State assistance

Illinois has made over $90 million in assistance available for small businesses outside of Chicago.

Illinois Small Business Emergency Loan

  • $60 million for businesses in any industry
  • Businesses must be located outside Chicago
  • Loans will be given up to $50,000

Downstate Small Business Stabilization Program

  • A partnership with local governments
  • Funds are meant to pay for 60 days of operation for non-essential businesses
  • Applies to businesses with fewer than 50 employees
  • Grants are available for up to $25,000

Hospitality Emergency Grant Program

  • Relief fund of $14 million run by the Illinois Department of Commerce and Economic Opportunity for small businesses in the hospitality industry
  • Bars and restaurants that generated between $500,000 and $1 million in revenue in 2019 can receive up to $25,000
  • Bars and restaurants that generated less than $500,000 in revenue in 2019 can receive up to $10,000
  • Hotels that generated less than $8 million in revenue in 2019 can receive up to $50,000

The SBA has also made available Disaster Assistance Loans up to $2 million for Illinois businesses impacted by losses from coronavirus.

Local assistance

Chicago $100 million relief package

  • Funded by a public-private partnership
  • Businesses that experienced a 25% decrease in revenue and have fewer than 50 employees
  • Loans are for up to $50,000

Cook County Community Recovery Fund

  • $10 million in seed money for 0% loans for suburban small businesses and independent contractors
  • Small businesses with fewer than 25 employees, less than $3 million in revenue, can get loans up to $20,000
  • Gig workers and those with over half of income from 1099 contract work can get loans up to $10,000 if they have less than $100,000 in gross annual income

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