Small-business PPP loans are flowing, and more aid could be on the way. Here’s what’s available.

Lauren Zumbach, Chicago Tribune
·6 min read

The small-business aid included in the $900 billion pandemic relief package approved last month has started to flow, and some programs have made changes meant to make them easier for the smallest businesses to access.

The U.S. Small Business Administration approved more than $5 billion in new Paycheck Protection Program loans in the first week the program was brought back, and opened the PPP to a wider group of lenders Tuesday.

More assistance could be on the way: President Joe Biden’s $1.9 trillion coronavirus relief plan calls for $15 billion in small-business grants and a $35 billion investment in state, local, tribal and nonprofit small-business financing programs providing low-interest loans and venture capital.

While several small-business aid programs from state and Chicago-area local governments ran out of money by the end of December, some officials are hopeful the new federal packages will include funds to bring them back.

If more dollars become available, “our team is ready to flip the switch and start the program again,” said Greg Bedalov, president and CEO of economic development group Choose DuPage, which worked with DuPage County to give 1,621 local businesses $21 million in grants last year.

In the meantime, here are some of the programs available to small businesses seeking assistance:

Paycheck Protection Program

The forgivable loan program got $284 billion for a new round of small business loans as part of last month’s $900 billion pandemic relief package, and a few changes were made to help small businesses that struggled to access the program during the rush when it launched last spring.

This year, only community financial institutions and small lenders were able to make loans during the first week. More than 60,000 loans were approved in the week after the program reopened Jan. 11, according to the Small Business Administration. Larger banks began fielding applications Tuesday.

Funds also have been set aside for borrowers with fewer than 10 employees, small businesses in low- or moderate-income neighborhoods and businesses that did not get a PPP loan when they were available last year.

Restrictions are also tighter for businesses applying for a second PPP loan. Caps on the number of employees and size of the loan are lower and businesses must be able to show they lost 25% or more of their revenue during at least one quarter in 2020.

Smaller, minority-owned businesses struggled to access PPP loans when the program first opened because some lacked banking relationships or needed more time to put together applications than bigger companies with more resources. But many had a better experience when additional funds were made available last year, said Karen Freeman-Wilson, president and CEO of the Chicago Urban League.

Shuttered Venue Operators Grant

The Small Business Administration is overseeing a new $15 billion grant program for live event venues and promoters that have been shut down for much of the pandemic.

Priority will go to venues suffering the steepest financial losses. Only those that lost 90% or more of their revenue between April and December will be able to apply in the first two weeks after the program opens. Applicants can receive up to $10 million and $2 billion has been set aside for businesses with fewer than 50 employees.

Venues interested in receiving grants cannot also seek new PPP loans, though venues that got a PPP loan before Dec. 27 are eligible. The Small Business Administration has not said when it will begin taking applications.

Economic Injury Disaster Loans

Another Small Business Administration effort is Economic Injury Disaster Loans, designed to cover working capital and operating expenses. The loans will be available through the end of the year, said spokeswoman Andrea Roebker.

There is also new funding for a related grant program that ran out of funding, though only businesses that applied previously and were turned down or received less than the full $10,000 grant are eligible.

Businesses must also be in low-income communities and have lost at least 30% of their revenue over an eight-week period during the pandemic to receive grant money. The Small Business Administration said it will begin reaching out to businesses that qualify in the coming weeks.

Help applying for federal programs

Illinois is no longer awarding small-business grants, but it is investing $3.4 million in programs designed to help small businesses get aid from federal programs like PPP — particularly small and minority-owned businesses that struggled to navigate the program last year.

About $2.4 million will go to the state’s 42 Small Business Development Centers, which provide free assistance to businesses, with a portion of it funding additional COVID-19 aid program advisers, the Department of Commerce and Economic Opportunity said.

The remaining $1 million will go to a “community navigator” program that pairs groups that specialize in aiding businesses with community organizations that can connect them with businesses owners who have a tougher time accessing resources.

The state used the strategy to promote access to its Business Interruption Grants, which awarded $275 million to small businesses across the state, after seeing small minority-owned businesses struggle to access the first PPP loans last year, said Department of Commerce and Economic Opportunity assistant director Michael Negron.

Organizations like The Resurrection Project, Illinois Business Immigration Coalition and Chicago Urban League spread the word about the grant program to nearly 30,000 small businesses and walked owners through applications if needed.

There was far more need than funds available: The program got applications from roughly 40,000 businesses, nearly 9,000 of which received grants.

About 32% of Business Interruption Grant dollars went to minority-owned businesses, 31% to woman-owned businesses and 80% to businesses with less than $1 million in annual revenue, according to the state.

Negron said he’s hopeful additional funding under Biden’s proposal would give the state money for more grants, but “right now our hands are full trying to help businesses access PPP and other programs.”

Low-interest loans

An Illinois Treasurer’s Office program that made $500 million available to banks and credit unions at very low interest rates to encourage them to give struggling businesses loans at below-market interest rates is still available.

Businesses and nonprofits must have had operations shut down or limited by the pandemic to be eligible for the loans. They must also have less than $1 million in liquid assets or less than $8 million in average annual revenue and either be based in Illinois or agree to use the funds there.

Nearly all of an initial $250 million was claimed in the month after the program was introduced in March, but demand slowed down after PPP became available and the Federal Reserve dramatically cut interest rates, said state Treasurer Michael Frerichs. About $300 million is lent out, he said.

Private grants

There are also some private programs, including a $10 million grant program for minority-owned businesses from financial services technology firm Fiserv. Applicants must have less than $1 million in annual revenue and fewer than 10 employees.

Chicago-area businesses will be able to apply for a total of about $1 million in funding between Feb. 8 and 16 and applications will be reviewed in the order received, said Fiserv Senior Vice President Leslie Pearce.

lzumbach@chicagotribune.com