The COVID-19 outbreak has impacted nearly every aspect of our lives and our communities. Together, as we continue social distancing and practicing other safety measures, we remain hopeful that our efforts will slow the virus’s spread and help return life back to some degree of normal.
But bouncing back will likely prove more difficult for small businesses and nonprofits, which also impacts the rest of our communities, due to local organizations’ significant influence on the Arizona economy.
In Tucson, companies with fewer than 50 employees make up over 70% of the Tucson Metro Chamber's membership, while firms with less than 100 employees make up 44% of the private workforce.
According to AZ Gives Nonprofit Impact Poll , 84% of Arizona’s nonprofit organizations reported decreased revenue due to COVID-19, with the drop averaging 35%.
It’s clear that if we want our communities to return to normal, we’ll need our small businesses and nonprofits to weather the storm. Fortunately, a network of government agencies, foundations, and nonprofits now offer various ways to help our small business and nonprofit communities during this difficult time.
However, the variety of resources and the specific details can leave business owners overwhelmed and confused about which funds suit their needs. That’s why we’ve compiled all the currently available COVID-19 funding resources in one place.
The Small Business Administration: Your First Step
The federal government empowered the Small Business Administration (SBA) to serve as the frontline defender against the economic shutdown caused by COVID-19. The SBA works with banks and credit unions to distribute loans and other federal funds intended to save our small business and nonprofit sectors.
The SBA created two funds to provide businesses with the financial resources needed to help sustain them until the economy rebounds. All businesses with less than 500 employees may apply, including nonprofits, sole proprietorships, self-employed individuals, and independent contractors.
Economic Injury Disaster Loan
The Economic Injury Disaster Loan (EIDL) lends low-interest loans to businesses and nonprofits hurt by the COVID-19 shutdown. The SBA created this vital economic support to cover the temporary loss of revenue from a declared disaster.
The program provides up to $2 million in loans, which small business owners can use to cover payroll costs, fixed debts, accounts payable, and other bills directly impacted by COVID-19. Loans for small businesses with no other credit options feature interest rates of 3.75%, and 2.75% for nonprofits.
Along with favorable rates, the loans allow long-term repayments of up to 30 years and allow payments to be deferred for one year after the origin of the loan.
Paycheck Protection Program
Under the CARES Act, Congress created the Paycheck Protection Program, which helps businesses make payroll during the shutdown. While the loans are government-backed, they are issued by private banks and credit unions. Details of the program include the following:
● Loans can cover 2.5 months of average payroll or $10 million, whichever is lower.
● Loans can also be used for rent, health benefits, insurance premiums, utilities, and more.
● Loan payments are deferred for 6 months.
● Loan amounts can be forgiven if employee and compensation costs remain the same. Here is a more detailed breakdown of specific requirements for loan forgiveness.
● Payroll costs capped at $100,000 per employee.
After the first round of stimulus funds exhausted quicker than expected, Congress approved another $320 billion dollars to replenish the program, however, these funds are not expected to last long, so the chances of securing this funding is slim for those who are not already in the pipeline from an earlier application submission.
The SBA also offers Express Bridge Loans and SBA Debt Relief for qualifying businesses. Visit SBA.gov to see all available options.
Additional Emergency Funding Options for Small Businesses
Along with federal loans and grants, there are a handful of funds created by local organizations to help small businesses in Phoenix, Tucson and Southern Arizona deal with the financial burden caused by COVID-19.
These funds are typically quicker to disperse upon approval and are more flexible to adjust to a community’s shifting needs. Here are a few options.
Community Investment Corporation Emergency Microloans
For over 25 years, Tucson-based Community Investment Corporation (CIC) has supported entrepreneurs and small businesses in Pima County with microlending and education.
The organization set up three loan programs to address differing needs. The first offers loans of up to $10,000 at the enhanced community benefit rate of 3%, which is usually only available to nonprofits. These loans can be extended to five years if needed.
CIC also offers loans with interest-only payments for up to six months to allow businesses to recover from challenges caused by COVID-19.
Finally, CIC partnered with Growth Partners of Arizona (GPAz) to provide no-interest and no-fee loans through the Kiva microloan model. These loans are crowdfunded through Kiva’s worldwide platform and provide community-backed business loans ranging from $1,000 to $15,000. You can fund a local business through a Kiva lender for as little as $25.
Vantage West Credit Union is proudly sponsoring CIC’s efforts through a match of ($25,000) through Tucson Helping Tucson, a weekly livestream program airing each Saturday that will culminate in a three-day fundraising telethon event.
Local First Arizona’s Small Business Relief Fund
Local First Arizona (LFA) has long served as a valuable resource for small businesses in the state. With COVID-19 crushing our small businesses, LFA’s help and expertise is needed more than ever.
Local First Arizona now offers mini-grants to Arizona’s smallest, locally-owned, independent enterprises with zero to three employees. To be eligible, businesses must earn less than $250,000 in annual revenue, or about $35,000-$45,000 in net profits.
If accepted, loan recipients receive funds within five days. Priority is placed on business owners with children under 18 at home and families reliant on the business as their sole source of income.
Additional Emergency Funding Options for Nonprofits
Southern Arizona’s wide array of nonprofits have been hit just as hard by COVID-19, whether it’s fundraising events being cancelled or funding sources drying up. Here are some funding sources targeted specifically for our area’s nonprofits.
Community Foundation for Southern Arizona COVID-19 Community Response Fund
For 40 years, the Community Foundation for Southern Arizona (CFSA) has funded a diverse group of community projects in the fields of animal welfare, arts and culture, education, and more.
CFSA established two funds to help area nonprofits. The COVID-19 Community Support Fund provides grants in the range of $3,000 to $20,000 to nonprofit organizations in Southern Arizona to cover general operations directly affected by the COVID-19 outbreak. The foundation processes applications within two weeks of acceptance and reviews applications on a rolling basis.
The COVID-19 Nonprofit Event Relief Fund provides one-time grants of $3,000-$10,000 for nonprofits forced to cancel critical fundraising events and programming. To qualify, events and programming must have been cancelled on or after March 1, 2020.
Arizona Community Foundation COVID-19 Community Response Fund
The Arizona Community Foundation (ACF) has issued over 1,700 funds and nearly $800 million to nonprofits and students across the state of Arizona since their founding in 1978. ACF now offers both immediate relief and long-term recovery grants for different stages of economic recovery.
Immediate relief grants address funding for general operations directly related to changes in service delivery resulting from the COVID-19 outbreak. It also provides direct assistance to economically vulnerable individuals and families.
Long-term recovery grants address the impact of lost revenue due to closures, cancellations, or service disruptions following the expiration of the State of Arizona’s Emergency Declaration. The foundation’s advisory council will review funding requests once the need for immediate relief has subsided.Click here to apply or learn more about the funds.
How Vantage West Is Helping Members
As a Tucson-based credit union, Vantage West’s success is intimately tied to the success of our Members and communities we serve. To account for hardship resulting from the COVID-19 pandemic, we are offering the following types of assistance:
- Waiving CD early withdrawal penalties for up to $5,000 per Member per month
- Offering no-fee Skip-a-Pay service on consumer loans (excluding mortgages)
- Waiving phone loan payment fees
- Extending the 2020 scholarship deadline.
We are also offering assistance to Business Members with term loans, including commercial real estate and commercial vehicle loans, business credit cards, lines of credit, and more.
We’ve placed Financial Hardship Loan Forms on our website, where Members and Business Members can request assistance.
Visit VantageWest.org/HealthAlert to learn all the ways Vantage West can serve you throughout this tough time.
We will get through this together. And together, we’ll keep southern Arizona a place where our community members help each other thrive. Stay safe and remember, we’re here to help.
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