University of Illinois Extension's Community & Economic Development Team is dedicated to helping small businesses across Illinois navigate this difficult time. Check out this list of grants and loans available for small businesses affected by COVID-19. The list is updated as new programs are added and others are closed.
Grants and Forgivable Loans
Economic Injury Disaster Advance Loan
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Advance Loan of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Applicants must be in the process of applying for a US SBA Economic Injury Disaster Loan to qualify for the advance. This loan advance will not have to be repaid.
CARES ACT – Paycheck Protection Program
STATUS: New funds for this program have been approved and the SBA is taking applications beginning April 27, 2020.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses of less than 500 employees to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The Paycheck Protection Program will be available through June 30, 2020.
Eligible businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Lenders are now processing applications.
Loan amount is based on 2.5 times the business’ total average monthly payroll in 2019 and will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 years and an interest rate of 1.0%.
To prepare your application, download a sample form to see the information that will be requested by your lender. Gather all the required information before you begin your application.
Illinois Downstate Small Business Stabilization Program
Funds are available for 60 days of verifiable working capital up to a grant ceiling of $25,000 for private for-profit small retail and service businesses or businesses considered non-essential with less than 50 employees. The business must have been in business and good standing with the State of Illinois since January 1, 2017. Only units of local government may apply. Municipalities must not be a HUD direct entitlement community or be located in an urban county that receives “entitlement funds.” Small businesses must work with their local governments. Local governments should contact the Community Development Division of the Illinois DCEO. This webinar recording from Il-DCEO describes the entire application process, including eligibility.
Low Interest Rate Loans
LISC – State Farm Small Business Relief Fund Loan Program (Central Illinois)
If you feel the following loan program would meet your needs, please complete this questionnaire: https://www.surveymonkey.com/r/LISCStateFarm. This step is critical in that it will determine applicant eligibility for the program
If you own a small business in central-Illinois, you may be eligible for the LISC – State Farm Small Business Relief Fund Loan Program. The LISC Central Illinois executes a strategy that invests in:
- Target neighborhoods of East Bluff and South Side (Peoria), and Richland (East Peoria)
- Key cities in Central Illinois, including Bloomington, Champaign, Decatur, and Springfield
- Rural communities all across the region with assistance from our LISC Rural team
LISC provides loans to small businesses through the LISC Rapid Relief and Resiliency Fund. The program allows LISC to make loans similar to banks, but with more flexible credit standards to reach businesses that might not qualify for conventional bank financing. Rates and terms: Size: $75,000 - $250,000 (real estate up to $500,000). Uses: working capital, equipment, inventory, tenant improvements, real estate purchases, debt refinancing, etc. Interest rate: 2% for initial 12 months (up to 6.75%) Term: Up to 48 months and up to 20 years amortization for real estate loans.
- These are working capital loans used to pay business expenses.
- Eligible entities may qualify for loans up to $2 million
- Interest rates are 3.75% for small businesses, 2.75% for nonprofit organizations; terms up to 30 years; first payment deferred for one year.
- SBA is encouraging small businesses to apply as soon as possible as loans are first come, first served. Please apply directly to SBA’s Disaster Assistance Program
Illinois Small Business Emergency Loan Fund
STATUS: As of May 1, 2020, the state is "temporarily suspending the acceptance of applications" until they have time to process those already received. Check back for updates.
- Eligible businesses must be located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019. Payments will be deferred six months and then borrowers will begin making fixed payments at 3% annual interest rate for the remainder of a five-year loan term. There is no pre-payment penalty.
- Loan funds must be used for working capital, and at least 50% of loans proceeds must be applied toward payroll or other eligible compensation including salaries, wages, tips, paid leave, and group healthcare benefits. Eligible uses will exclude compensation in excess of $100,000.
- Businesses must be located in Illinois and have experienced at least a 25% decrease in revenues as a result of COVID-19. Please ensure ability to provide bank statements dating back to October 2019 and most recent tax returns. At this time, non-profits and farm businesses that would traditionally qualify under the USDA’s farm loan program are not eligible.
If you see a need for a correction, or have a question, please contact Pam Schallhorn.
Pam Schallhorn is a University of Illinois Extension Specialist in Community and Economic Development specializing in small business development and entrepreneurship. Previously, she was a Vice President of Commercial Lending for several banks and served as the Director of the Small Business Development Center in Rockford, Illinois. She holds a bachelor’s degree in finance and a master’s degree in political studies. Her office is in Springfield. Contact Pam