PROVIDENCE, RI – In an effort to assist small businesses with cash flow and keep Main Street shops from permanently shuttering, U.S. Senator Jack Reed (D-RI) helped pass a $2.2 trillion coronavirus economic rescue package through the Senate that includes $377 billion to assist small businesses and companies with 500 employees or fewer, including non-profits and the self-employed.

Senator Reed says the main features are forgivable loans for most small businesses and emergency grants for some small businesses as well as tax deductions to make it easier for companies to keep employees on the payroll and help them with overhead.  Under the legislation, small businesses should check directly with their financial institutions for loans and the U.S. Small Business Administration (SBA) for grants.

There are several institutions in Rhode Island that are qualified to underwrite these new forgivable loans and small business owners can get more information and guidance at: and from the SBA’s Rhode Island district office:

“Small businesses are facing a historic cash crunch and daunting challenges.  I pushed for a major infusion of resources to help small businesses and I will continue working to ensure the federal government does its part for Main Street businesses.  For employers who need financial assistance, the best way to begin is to talk to your lender and apply.  If your lender doesn’t offer it, there are plenty who do and help can be found at the SBA’s website,” said Senator Reed, who also encouraged Rhode Islanders to support local businesses as best they can, through utilizing restaurants and businesses offering curb-side pickup; or purchasing gift cards online that can be used at a later date.

Senator Reed says the federal help for small businesses in Rhode Island includes:

Emergency Grants of up to $10,000: The bill includes $10 billion for emergency grants of up to $10,000 to provide emergency funds for small businesses to cover immediate operating costs.  Small businesses may apply directly to the U.S. Small Business Administration (SBA) to receive an economic injury disaster grant that does not need to be paid back.  Grants should be paid out to business owners within three days of their application being approved and may be used to maintain payroll and service other debt obligations.

Loans of up to $10 million, a portion of which may be forgivable:  $350 billion is allocated for the SBA to provide loans of up to $10 million per business, with interest rate on the loans capped at 4 percent. SBA lenders are authorized to make loans equal to 250 percent of an employer's average monthly payroll up to $10 million.  A Paycheck Protection Program (PPP) is included to help businesses with fewer than 500 employees.  Up to eight weeks of average payroll and other costs will be forgiven if the business retains its employees and their salary levels.  Principal and interest is deferred for up to a year and all borrower fees are waived.  This temporary emergency assistance can be used in coordination with other COVID-financing assistance established in the bill or any other existing SBA loan program.

Relief for existing loans: The bill includes $17 billion to cover a six month hiatus of payments for small businesses already using SBA loans.  

The SBA says it is also offering a number of loans, including SBA express bridge loans, for business who have a relationship with an SBA express lender. The loan offers up to $25,000 in relief with less paperwork.

Disaster Loans: Rhode Island small businesses also have access to the Economic Injury Disaster Loan (EIDL – pronounced ‘idle’) program, which works with states to provide low-interest loans to small businesses and non-profits severely impacted by the coronavirus.

EIDLs are loans of up to $2 million that carry interest rates up to 3.75 percent for companies and up to 2.75 percent for non-profits, as well as principal and interest deferment for up to 4 years.  The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.

The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020.  The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.

A business that receives an EIDL between January 31, 2020 and June 30, 2020 as a result of a COVID-19 disaster declaration is eligible to apply for a PPP loan or the business may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the Paycheck Protection Plan.

NOTE: Beware of scammers: There is no immediate deadline for an EIDL application.  It does not cost anything to apply, download, or to access SBA forms and papers.  No credit card is required

Senator Reed also notes that small businesses that may have already laid off workers can still qualify for payroll loan forgiveness if they use the federal funds to rehire workers. 

He included a Small Business Owner’s Guide to the initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was produced by the Democratic staff of the Senate Small Business and Entrepreneurship Committee.