Loans & Grants Are Available for Arkansas Businesses During COVID-19
5 Apr 2020
At the state and local level businesses may qualify for grants, loans and incentives when creating jobs and growing within Arkansas. We understand that existing businesses are particularly interested in what state and federal funding programs are available to assist with business stabilization during COVID-19. We have detailed those programs below, and encourage businesses to apply for the help and support they need. Additional information and resources can be found here.
Arkansas Department Of Commerce Quick Action Loan Guaranty Program
The Arkansas Department of Commerce announced they will begin receiving applications for the Quick Action Loan Guaranty Program to address the immediate needs of businesses affected by the COVID-19 outbreak. The program will be administered by the Arkansas Economic Development Commission (AEDC) in partnership with the Arkansas banks.
Funds for the program are provided through an allocation of $4,000,000 from the Governor’s Quick Action Closing Fund, and an additional $3,000,000 from Attorney General Leslie Rutledge’s Consumer Education and Enforcement Fund. A portion of the funding will go towards the guaranty loan program while other funding will be focused on direct loans through AEDC.
“In such an unprecedented time in our state’s and nation’s history, it’s critical for AEDC to partner with our lenders to address our current economic crisis,” said Secretary of Commerce Mike Preston. “Our businesses need relief and we are dedicated in helping see them through this difficult time.”
AEDC’s Quick Action Loan Guaranty is capped at $250,000 and will guaranty up to 80% of the principal balance of a loan issued by a participating lender of the program. Funds may be used for working capital, inventory, payroll and other uses that facilitate the continuation of business operations.
Arkansas lenders participating will be listed on the AEDC COVID-19 website.
Federal Loans & Grants for COVID-19
Businesses who meet the SBA requirements of a small business (500 employees or fewer) can apply for two programs as a result of COVID-19. The SBA Economic Injury Disaster Loan and Paycheck Protection Program are outlined below.
SBA Economic Injury Disaster Loans Available Now
This loan program is for businesses who have directly been impacted by COVID-19, and those who have been impacted because their customers and suppliers have been.
- Borrow up to $2 million per business
- Interest rates of 3.75% for small businesses and 2.75% for non-profit agencies
- Long-term repayment plans of up to 30 years
- These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
The Paycheck Protection Program
The Paycheck Protection Program is a loan that operates more like a grant, because if you meet certain criteria the entire loan is forgivable - you never have to pay it back. If you don’t meet that criteria, the loan can be paid back at a rate of 4% over ten years.
- Borrow eight week’s worth of payroll expenses
- Loans up to $10 million
- Pay for salaries, benefits, tips and operating expenses
- The loan is forgivable as long as you keep employees on the payroll from February 15, 2020 through June 30, 2020
- Businesses must retain employees and wages relative to the previous year
Apply at your local bank or find a lender here.