Economic Injury Disaster Loan Program
The Small Business Administration’s (SBA) Economic Injury Disaster Loan Program provides small businesses, including non-profits, with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses and 2.75% for non-profits.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
SBA works with lenders to provide loans to small businesses. The agency does not lend money directly to small business owners but sets guidelines for loans made by its partnering lenders, community development organizations that makes it easier for small businesses to get loans. Loans guaranteed by the SBA range from small to large and can be used for most business purposes, including long-term fixed assets and operating capital.
Federal Emergency Stimulus
As of the writing of this memorandum on Wednesday afternoon, the federal government is building a multi-phase and multi-billion dollar stimulus package which includes a proposal for $50 billion to aid the airline industry, $150 billion for distressed sectors of the economy and two rounds of direct payments of $250 billion each to be distributed on April 6 and May 18, and the creation of a small business interruption loan program. The small business interruption loan program is an additional resource to what was mentioned above for the SBA Economic Injury Disaster Loan Program and staff is waiting for more information on this new resource.
Reduced Work Hours
Employers experiencing a slowdown in their businesses or services as a result of the COVID-19 impact on the economy may apply for the Unemployment Insurance (UI) Work Sharing Program through the State of California Employment Development Department. This program allows employers to seek an alternative to layoffs —retaining their trained employees by reducing their hours and wages that can be partially offset with UI benefits. Workers of employers who are approved to participate in the Work Sharing Program receive the percentage of their weekly UI benefit amount based on the percentage of hours and wages reduced. To qualify, employers must reduce hours and wages by at least 10 percent, but no more than 60 percent.
Unemployment Insurance (UI)
The Employment and Training Administration announced new guidance outlining state flexibilities in administering their unemployment insurance programs to assist Americans affected by the COVID-19 outbreak.
Under the guidance, federal law permits significant flexibility for states to amend their laws to provide unemployment insurance benefits in multiple scenarios related to COVID-19. For example, federal law allows states to pay benefits where:
- An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
- An individual is quarantined with the expectation of returning to work after the quarantine is over; and
- An individual leaves employment due to a risk of exposure or infection or to care for a family member.
In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19. Workers who are temporarily unemployed due to COVID-19 and expected to return to work with their employer within a few weeks are not required to actively seek work each week. However, they must remain able, available and ready to work during their unemployment for each week of benefits claimed and meet all other eligibility criteria. Eligible individuals can receive benefits that range from $40-$450 per week.
The Governor’s Executive Order waives the one-week unpaid waiting period, so individuals are able to collect UI benefits for the first week they are out of work. For eligible individuals, the EDD processes and issues payments within a few weeks of receiving a claim.
Disability Insurance (DI)
For individuals that are diagnosed with COVID-19 or currently in quarantine and unable to work (certified by a medical professional), they can file a Disability Insurance (DI) claim. DI provides short-term benefit payments to eligible workers who have a full or partial loss of wages due to a non-work-related illness or injury. Benefit amounts are approximately 60-70 percent of wages (depending on income) and can range from $50-$1,300 a week. As with UI, the Governor’s Executive Order waives the one-week unpaid waiting period for DI.
For workers who are unable to do their usual job due to exposure to and/ or contracting COVID-19 during the regular course of their work, they may be eligible for workers’ compensation benefits.
Paid Family Leave (PFL)
Individuals unable to work because they are caring for an ill or quarantined family member with COVID-19 (certified by a medical professional), can file a Paid Family Leave (PFL) claim. PFL provides up to six weeks of benefit payments to eligible workers who have a full or partial loss of wages because they need time off work to care for a seriously ill family member or to bond with a new child. Benefit amounts are approximately 60-70 percent of wages (depending on income) and range from can range from $50-$1,300 a week.
South County Economic Development Council Capital Loans
The South County Economic Development Council is offering one-time, zero interest loans up to $5,000 to 50 restaurants in South County to assist them in staying open and continuing to serve food. Additional information is available here.
Metered and Timed Parking 30-Day Moratorium
Under the authority of the Chief of Police and City
Engineer, staff is exploring a 30-day moratorium on all metered parking and
timed parking limits along Third Avenue and throughout the City. This has been
considered in the interest of supporting businesses’ take -out and delivery
services during this time of modified service delivery. Staff does not anticipate
significant impacts to the parking fund balance due to implementation of this
South County Career Center
Employers planning a closure or major layoffs as a result of the coronavirus can get help through the Rapid Response Program at the South County Career Center. Rapid Response teams will meet with businesses to discuss needs, help avert potential layoffs, and provide immediate on-site services to assist workers facing job losses. For more information, refer to the Rapid Response Services for Businesses Fact Sheet .
Utility Payment Deferment
SDG&E will waive late payment fees and will not disconnect service for business customers experiencing financial hardship and who are unable to pay their gas and electricity bills. Additionally, Sweetwater Authority is currently suspending water shutoffs for failure to pay water bills.
Crisis Communications Support
KCD Public Relations is offering complimentary crisis communications support to small businesses and non-profits in Southern California.
There are a myriad of resources available at the present moment to assist businesses with sustaining themselves throughout the financial turmoil of the COVID-19 pandemic. In Chula Vista, 9 out of 10 businesses are designated as small businesses having 10 or fewer employees—the timing, availability and access to these resources are of critical importance to these businesses. Staff will ensure a robust effort is made to notify businesses of the resources available to them as summarized within this memorandum. As this pandemic continues to evolve, so do the resources available to combat the damage. Staff will be actively seeking additional resources, knowledge and support for businesses and will be providing education to the business community during this difficult time.
Information provided by: City of Chula Vista