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How businesses can access capital during the COVID-19 Crisis

Resources to help businesses cover costs during the current economic crisis

Rose Standifer //April 3, 2020//

How businesses can access capital during the COVID-19 Crisis

Resources to help businesses cover costs during the current economic crisis

Rose Standifer //April 3, 2020//

The current economic climate is unsettling for many businesses. Startups and small businesses are the first to feel the brunt of economic downturns. How do you find resources to cover payroll, rent, and other operational costs? We’ve compiled public and private resources to help. 

Public Sources of Capital

US Small Business Administration Programs

Businesses that meet eligibility criteria are or soon will be able to access programs administered by the U.S. Small Business Administration (SBA): Either the Economic Injury Disaster Loan (EIDL) program or the SBA’s flagship program, the 7(a) program. EIDL just received enhanced funding through legislation passed by Congress, and we anticipate the second soon will. 

EIDL Program

The EIDL program assists small businesses suffering substantial economic injury as a result of COVID-19, providing loans of up to $2 million at an interest rate of 3.75% (or 2.75% for non-profits) that are payable over terms of up to 30 years. On March 19, 2020, all counties in Colorado were declared eligible by the SBA; the filing deadline under this program is December 21, 2020.   

Are You Eligible? 

The program is available to small businesses that qualify and are located in designated states and counties throughout the country. For details on eligibility and application instructions, visit the SBA’s Disaster Assistance page. To be eligible for the program, businesses must: 

  • Be physically located in a declared county or state; 
  • Meet the SBA requirements of a small business (based on revenues, number of employees and industry); and
  • Have suffered working capital losses due to COVID-19, or offer services directly related to the businesses in the declaration.

How to Apply

There’s a bit of paperwork to sort through to access these loans, but for qualifying businesses, the relief can be substantial. Standard SBA paperwork includes a prior year’s tax return, personal financial statement, and schedule of liabilities, among other documentation. Local small business development organizations are available to assist businesses in applying for SBA funds. For example, in Colorado, the Small Business Development Center Network (SBDC) has several resources for Colorado small businesses arranged by region. Many Colorado businesses in the Front Range can visit the Denver Metro or Pike’s Peak SBDC websites for more information. 

Small Business Interruption Loan Program

On March 27, President Trump signed into law an economic relief bill (the CARES Act) that contains additional assistance for small businesses in the way of expanding the SBA’s 7(a) loan program. The new program, which is known as the Paycheck Protection Program, is available to small businesses starting April 3, 2020.  The deadline to apply for these loans is June 30, 2020.  A few details of the program are as follows:

  • Loan amounts of up to 2.5 times the business's average monthly payroll costs (up to $10 million), for the purposes of making payroll, healthcare, mortgage, rent, utilities, and interest payments;
  • No requirement to provide personal guarantees or collateral;
  • 2 year loan terms, with an interest rate of 1.00%;
  • Payment deferral for the first 6 months;
  • Waived loan fees; and
  • Partial forgiveness for borrowers that maintain payroll, mortgage, rent, utility expenses, and employees at certain levels.

Note that borrowers receiving loans under the EIDL program would not be eligible for loans under this program if the loans are used for the same purposes, unless the disaster loan was made between February 15 and March 31, 2020.   

Eligible applicants should start thinking about applying now. Given the widespread nature of the impact of COVID-19, interest in these funding sources is anticipated to be significant.  

State and Local Programs 

Additionally, certain cities and states have stepped in to provide financing to small businesses, separately from the federal program. Denver is one of the included cities and can provide up to $7,500 via online applications.

Private Sources of Capital

In addition to public capital, some private companies have decided to make funds available to small businesses that have been hit hardest by the coronavirus pandemic.

Corporate-Sponsored Programs

Facebook has created a Small Business Grants Program, which will provide $100 million in cash grants and ad credits for up to 30,000 small businesses in the countries in which Facebook operates. The eligibility details are still being determined.

Amazon also announced a Neighborhood Small Business Relief Fund, which will provide up to $5 million in cash grants to Seattle small businesses in need of assistance.  According to Amazon, the fund is intended for small businesses with fewer than 50 employees or less than $7 million in annual revenue, and that are located within a few blocks of Amazon’s office locations in Washington state.

Stay tuned, as large companies seem to be joining in the relief effort. Yelp announced that they will be providing $25 million worth of advertising, products, and services primarily to local restaurant and nightlife businesses. Netflix announced a $100 million fund for workers in the creative community. Comcast announced it would be providing free Wi-Fi hotspots across the country and unlimited data for its customers. Many more are sure to follow suit.


  • Healthcare: The Bill and Melinda Gates Foundation, along with Wellcome and Mastercard, have created the COVID-19 Therapeutics Accelerator, a $125 million seed fund for the accelerated identification and development of treatments for the novel coronavirus.
  • Public Health: The Swiss pharmaceutical company Novartis has created a COVID-19 response fund that will provide $20 million in grants to support public health initiatives in communities most affected by the pandemic.
  • Critical Technology, Education, Government, and Healthcare: Cisco has announced it will commit $225 million in cash, in-kind, and planned-giving to support the response to COVID-19 for critical technology, education, government, and healthcare sectors. 

Additional Steps to Manage Capital

Surviving these difficult times may require a bit of creativity and flexibility. Below are other options you can try to lower or defer expenditures or increase available funds.

  • The Treasury and the IRS recently published guidance on tax payment deferrals.  
  • Check your insurance policy to see if the policy covers any of the losses you’re experiencing. Most general business policies do not cover losses as a result of a pandemic. Still, there is some support in the government to intervene on behalf of policyholders to try to free up some capital from insurance companies.
  • Consider a conversation with your bank – here are banks providing relief to customers affected by coronavirus pandemic.
  • Communicate with your landlord to understand their position on collecting rent, and whether they are willing to be flexible during this period, many are.
  • Finally, here is some sobering perspective from Pat LaPointe of Frontier Angels in Bozeman, Montana (courtesy of Peter Adams of Denver’s own Rockies Venture Club). Funds are still investing, though they’re likely slowing down their commitments. In the meantime, advice to startups – clarify your value proposition, manage expectations, and take it from those who survived similar world events in 2001 and 2008 that you may just get through this tough period.


Rose Standifer, Larkin Reynolds, Ezra Kramer and Brendan Leanos are attorneys at Moye White