Published April 03, 2020

COVID-19 Small Business Checklist

By Paul Wormley

Like most small businesses in the US, Hadley Capital and its portfolio of small businesses are facing unprecedented challenges resulting from the impacts of COVID-19. As we navigate the resources available to small businesses, I will be posting a checklist for small business owners along with links to various third party resources. This is not meant to be professional advice – please speak with your accountants, attorneys, human resources, and payroll advisors for guidance.

Small Business Loans

Small business owners are faced with an unprecedented dilemma resulting from the economic realities caused by the COVID-19 pandemic: you want to protect the business from severe cash flow issues but also want to care for your employees and not lose your businesses most valuable asset (its people).

This post provides a checklist of loans available to small businesses and is presented in the order of speed of availability.

SBA Express Bridge Loans (Only for businesses with a current SBA relationship)

Loan Amount: Up to $25,000

Rate and Term: Unknown but will be replaced by EIDL, described below.

If you currently have an SBA relationship, your first step should be to apply for an SBA Express Bridge loan of up to $25,000. This program has a fast turnaround and will be paid off in part or in whole by the EIDL loan described below.

Recommendation: If you have an SBA relationship, start here first as the turnaround time is the quickest.

Where to apply: SBA Bridge Lender. You need to contact your local SBA office to find the lender.

Covid-19 Economic Injury Disaster Loan (EIDL) Program

Loan Amount: $10,000 advance and up to $2.0 million total

Rate: 3.75% for small businesses and 2.75% for non-profits

Term: Up to 30 years

The EIDL program has been in place since 1953 and is designed to provide working capital loans that may be used to pay accounts payables, debt obligations, payroll, rent, and other bills. COVID-19 is the first time it has been used for a pandemic. Small businesses can receive up to $2 million in working capital. You may request a $10,000 cash advance in three days. The cash advance does not need to be repaid if you are unable to get the loan.
This loan is administered directly by the SBA and can be received in addition to the Paycheck Protection Program.

Recommendation: Apply for the loan now. Once the SBA reaches a decision, you have six weeks (and maybe longer) to decide to accept the loan.

Where to apply: SBA Covid-19 Economic Injury Disaster Loan. The application takes about 10 minutes.

Paycheck Protection Program (PPP)

Loan Amount: 2.5x Average Monthly Payroll Costs up to $10 million

Rate: Up to 4%

Term: Up to 10 years

Any small business (including self-employed, independent contractors, and sole proprietorships) with under 500 employees (some exceptions) that was in operation before February 15, 2020 may apply. PPP helps small businesses meet payroll obligations, pay rent or a mortgage or leasing agreement, and pay utilities. The U.S. Chamber of Commerce provides information on calculating your loan amount.

Loan Forgiveness: The most attractive aspect of this loan is that a portion of or all the loan can be forgiven to the extent it is used on the above obligations.

Reduction of Forgiveness: The forgiveness is reduced if there is a reduction in the number of employees or greater than 25% reduction in wages. Reductions in employees or payroll between February 15, 2020 and April 27, 2020 will not impact forgiveness as long as the reduction in employees or reduction in wages is eliminated by June 30, 2020.

Recommendation: Every small business should apply.

Where to apply: The PPP is administered through banks that administer SBA 7(a) loans and includes banks that are in the process of registering with the SBA. Call your primary business bank to determine if they will administer PPP.

Important Note: If you participate in PPP you cannot utilize the deferred FICA tax credits. Stay tuned for additional information on payroll tax payment deferral.


Small businesses are often like big families and the COVID pandemic has created an unprecedented dilemma for all of us to protect our businesses and our employees. These programs are a great start at dealing with this dilemma.

We will be posting on small business issues daily. In the upcoming posts, we will dive into tax credits and changes to Net Operating Loss rules and navigating employee matters.