The global pandemic of COVID-19 is on everyone’s minds these days. Millions of confirmed cases have been reported, and tens of thousands of people have died in the United States due to complications from the virus. Health and government officials continue to monitor the situation very closely. In countries throughout the world, non-essential businesses and schools have been temporarily closed in an effort to stop the spread of coronavirus. Illinois Governor J.B. Pritzker issued a “stay at home” order through April 30. For those small business owners and employers who are struggling to maintain their livelihoods, there is some relief in the form of financial assistance. The Illinois Department of Commerce & Economic Opportunity (DCEO) and the Illinois Department of Financial and Professional Regulation (IDFPR) established the Illinois Small Business Emergency Loan Fund to provide small businesses with the opportunity to apply for loans up to $50,000 at a low-interest rate.
Who Can Apply for the Bailout Loan?
The below eligibility requirements apply to small businesses that are in Illinois but are outside the city of Chicago. Small businesses within Chicago can apply to a similar loan program. Requirements are based on employment between October 2019 and December 2019. Seasonal businesses may use an employment average between January 2019 and December 2019.
In addition, the business must:
Be located outside of Chicago city limits.
Have fewer than 50 employees.
Have earnings/profit of less than $3 million in 2019.
Have experienced at least a 25 percent decrease in revenue because of the coronavirus outbreak.
Be located in Illinois and show proof of an Illinois business address and a valid license from a state jurisdiction.
Provide bank statements from October 2019 up to the most recent tax returns.
How Do Business Owners Apply?
DCEO is partnering with various lending institutions to offer access to the Small Business Emergency Loan Fund in areas throughout the state. Since the demand is high for this form of assistance, it is recommended that business owners reach out to lenders according to their location within Illinois. Once a loan application is submitted, the lender will review it, but due to the sheer volume of applicants, it may take some time to process the application. In addition, the state is hoping to add additional lenders to the program. It is important to note that owners will not have to begin making payments on the loan for six months. They will then make fixed payments at a low-interest rate for the remainder of a five-year term.
What Can the Loan Be Used For?
Loan funds must be used for working capital, with a promise to hire or retain a minimum of 50 percent of a workforce for six months. At least 50 percent of loan proceeds must be applied towards payroll or other types of compensation, such as salaries, wages, tips, healthcare benefits, and paid leave. This excludes compensation that is more than $100,000.
Contact an Illinois Employment Law Attorney
States across the country are working to secure access to financial resources for small businesses impacted by COVID-19. Established in 2007, the Miller Law Firm, P.C. provides comprehensive representation for complex legal matters. Our seasoned Schaumburg employer defense lawyer will protect your rights as an Illinois business owner. Attorney Richard J. Miller possesses a thorough understanding of corporate policies and procedures after years of experience working as a finance executive. To schedule your free consultation, call our office today at 847-995-1205.