Financial Resources for Pasadena Businesses Impacted by the COVID-19 Pandemic

Financial Resources for Pasadena Businesses Impacted by the COVID-19 Pandemic Main Photo

6 Apr 2020


As an economic development organization, we are here to support businesses and they work to deal with closures and the financial ramifications of them. With the federal stimulus bill being passed there are loan programs immediately available to help businesses with operating capital, and to keep people on the payroll. Here is a breakdown of the two main programs – the SBA and the Paycheck Protection Program. 

Paycheck Protection Program

The objective of the program is to provide small businesses with the capital they need to continue making payroll for an eight-week period occurring between February 15, 2020 and June 30, 2020.

Small businesses who have less than 500 employees are eligible to apply. In addition, independent contractors and gig economy workers may also be eligible.

Even though the program is designed to cover payroll for an eight-week period, businesses can actually borrow up to 2.5 times their average monthly payroll cost. As a result, businesses could get up to 10 weeks of payroll covered by the loan, up to $10 million. This loan can cover the entire payroll cost including salaries, wages, paid time off, tips, taxes and healthcare benefits. In addition to covering payroll costs, the loan can also help to pay for operational costs that could include rent and utility payments.

The loan is forgivable as long as businesses meet certain criteria that includes:

  • The employer maintains its payroll during the period of February 15, 2020 through June 30, 2020
  • The employer retains its employees and maintains wages relative to the previous year

If an employer does not meet all the criteria they may still qualify for partial loan forgiveness. Anything not forgiven can be repaid over a period of up to 10 years an interest rate of 4%. 

Businesses can apply with any SBA-certified lender, including local banks and credit unions. Businesses are encouraged to contact the bank they have a relationship with or to find a lender here.

SBA Economic Injury Disaster Loans 

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19).

Businesses with 500 or fewer employees who have been negatively impacted by COVID-19, either directly or because their suppliers and customers have, are eligible to apply. 

SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance per small business and 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 can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. The 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. 

You can complete the application online or download a paper application. 

For more information visit PasadenaEDC.com/Covid19