The COVID-19 emergency has put a profound strain on Nebraska's early childhood small businesses. This guide provides information on state and federal programs that can help small business owners cope with the pandemic.
Economic Injury Disaster Loan & Advance
The Small Business Administration is a federal government agency that provides supports to small businesses and entrepreneurs. The SBA offers a disaster loan program for businesses that are affected due to a direct result of a disaster. The business would need to be located in a declared disaster area to be eligible for assistance.
The entire State of Nebraska has been designated as a declared disaster area.
Early Childhood Programs and Businesses including self-employed child care providers would be eligible under the economic injury category. Economic injury means the business is unable to meet its obligations and pay ordinary and necessary operating expenses. The disaster loan assistance would provide the necessary working capital to help small businesses survive until normal operations resume after a disaster.
Additionally, as part of the economic injury disaster loan program there is also a loan advance. The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
Paycheck Protection Program (PPP) Loan
The Paycheck Protection Loan Program provides cash-flow assistance loans to employers who maintain their payroll during this emergency. If employers maintain their workforce, the SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15 and June 30, 2020.
The application form is to be completed by the Applicant and submitted to your SBA Participating Lender. Nearly all of the banks in Nebraska are SBA-certified. Submission of the requested information is required to make a determination regarding eligibility for financial assistance. Failure to submit the information would affect that determination. To prepare to submit an application, you can download a sample form to see what type of information will be requested.
Your local lender is the best first place to begin with any COVID-19 related financial business assistance. They will be able to determine your program eligibility and also help you compile the documentation and financial information needed for the application process.
Self-employed business owners and individual employees may be eligible for emergency federal or state Unemployment Insurance benefits. Find more information at FAQ: Unemployment Benefits for Early Childhood Professionals during COVID-19.
If your child care business has a minimum of 3 employees and has had to reduce the number of work hours due to the COVID-19 pandemic, they may be eligible to received Short-Time Compensation (STC) through the Nebraska Department of Labor. The STC program helps businesses retain workforce during a temporary slowdown in work. The program allows employers to voluntarily reduce staff hours rather than laying off employees.
The Nebraska Department of Labor will determine whether your company is current on its unemployment insurance taxes and whether the layoff is temporary and not related to seasonality or intermittent downturn. The employees’ hours must be reduced by at least 10%, but not more than 60%. The hours reduced in each affected unit must all be reduced by the same percentage.