Relief Programs for Small Businesses

Below is a portion of a Forbes article that lists some relief programs for small businesses affected by COVID-19, which would include all of us. I hope this is helpful to you.
List Of Coronavirus (COVID-19) Small Business Relief Programs
Forbes Staff Advisor
Editor’s note: We are updating this story regularly as more federal, state and local program details become available. Last update: March 23, 2020.
Small businesses have been hit hard by mandatory closures and safety measures required to slow the spread of the coronavirus (COVID-19).
In a March 18 letter to President Trump, the National Restaurant Association estimated that the restaurant industry would lose $225 billion over the next three months alone, leading to the loss of five to seven million jobs. Many other industries are suffering, too.
But businesses have a growing number of resources and relief programs to turn to, including emergency funding from the government, protection from eviction and business loan deferment. The FDIC is encouraging banks to work with customers to provide coronavirus-related assistance, related to both personal and business finances.
Below is a list of federal, state and lender-specific support to pursue, which will be updated to include programs as they’re released and refined. Return to this page regularly.
Federal Coronavirus Small Business Assistance
If you need cash to offset lost revenue and help keep your business afloat, the programs below can help. The U.S. Small Business Administration (SBA) coronavirus resource page ( provides a list of relief programs, and it offers guidance to small business owners during this crisis.
SBA Economic Injury Disaster Loan Program
As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus.
These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.
Who’s Eligible
  • As of March 23, businesses in every state plus American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands can apply.
  • You can use the loan to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay.
How to Apply
  • Apply online and select “Economic Injury” as the reason you’re seeking assistance.
  • You’ll need to supply required supporting documentation that could include the business’s most recent tax returns, a personal financial statement and a schedule of liabilities that lists all your current debts.
  • Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application.
Federal Income Tax Filing and Payment Deadline Extension
The federal tax return filing deadline is now July 15, 2020. For tax payments of up to $10 million, the IRS has also extended the deadline for both individuals and businesses to July 15, 2020. Estimated tax payments for 2020 originally due on April 15 will now be due on July 15.
Check with your state tax agency to find out if your business has more time to file or more time to pay state and local taxes this year as a result of the coronavirus. Several states have already aligned their tax filing and payment deadlines with the new federal deadline. States also may waive or reduce penalties on late tax payments.
State and Local Coronavirus Small Business Assistance
States and municipalities are adding programs by the day. Check your governor’s website for up-to-date information about relief available in your area. The National Governors Association offers a list of governors’ websites.
Michigan Small Business Relief Program
The State of Michigan will provide both grants and loans to small businesses affected by the coronavirus starting on or around April 1. Grants will be available in amounts of up to $10,000 to help cover working capital. Loans will be available in amounts from $50,000 to $200,000 at interest rates of 0.25%.
Who’s eligible: Companies with 50 employees or fewer can qualify for grants, while loans are targeted at companies with 100 employees or fewer that can’t get credit elsewhere. In both cases, businesses must show income loss.
How to apply: Applications aren’t yet available, but check Michigan Economic Development Corporation for updates.
Lender and Corporate Small Business Assistance Programs
Many banks have offered deferment and forbearance to business loan customers having trouble making payments. Check Forbes’ list of banks offering relief. You can also search for your bank on the American Bankers Association’s ongoing A-Z list of coronavirus response programs.
Facebook Small Business Grants Program
Facebook has committed to offering up to 30,000 small businesses $100 million in cash grants and Facebook advertising credits. The grants will be provided to businesses in more than 30 countries. Information is limited, but sign up to get more details from the company when they’re available. (

The Business Plan

A Business Plan is a thorough description of your business, your business goals, and your plans to achieve those goals. A Business Plan is the most important, yet most overlooked, document you can prepare for your business.  Potential lenders or investors almost always request a Business Plan.  But if you are self-funded, you might be tempted to skip it.  Don’t!

Writing a good business plan will force you to think hard about all aspects of your business and identify the various factors that can make your business a success or a failure.

The elements of a good business plan should include the following:

Executive Summary

This is a one-page summary of the business plan. It should briefly describe the purpose of your business and the contents of the plan. The best way to write the Executive Summary is to do it last, after you have thought out and written the rest of the plan.

Business Description

Begin with the purpose of your business and your short-term and long-term goals. This should include a short description of your industry including the present outlook and future possibilities. Also provide information on the various markets in the industry as well as any new products or developments that will benefit or adversely affect your business.

Market Analysis

This is where you define your Target Market – who do you think will need/buy your products/services? Describe the current market trends for both your industry and your potential customers – where is the market expected to go and how will your company fit? Also include details about your potential customers – their ages, education, income levels, etc.

Competitive Analysis

Compare your company to the direct and indirect competitors in your market along with their strengths and weaknesses. Detail your strategies to differentiate your company from the them. List any barriers to entry that could deter potential future competitors.

Design and Development

Describe the products or services your business will provide. Detail the product’s design, show its development and where you are within the development stage, and your plans to bring the product to production. Indicate if you have or plan to acquire any copyrights, trademarks or patents.

Products and Services

Detail exactly what you are planning to create and sell, how long your products will last, and how they meet an existing need. If you are a manufacturer, describe your products and your manufacturing process. Include information about suppliers and availability of materials. If you are a wholesale distributor, describe your products and the supply chain. If you are a retailer, describe your sources of inventory and your inventory management plan. If you are a service provider, describe your services and what makes you qualified to provide them.

Marketing Plan

How do you plan to sell your products or services? Will you sell online, in stores, or via catalogs? Describe your pricing strategy and how it compares to your competition. Indicate how buyers will learn about your company and your products. Explain any advertising and networking plans as well as sales incentives or promotions you will offer.

Management and Administration

Describe the legal structure of your business – sole proprietor, limited liability company, or corporation – and why that structure is best for your company. List all the owners and/or officers and describe their strengths. Also list the managers and describe their responsibilities and abilities.

Funding Requirements

Provide a summary of your financial needs. How much funding do you need? Give a detailed list of how the funds will be used and your plans to repay those funds.


Insert financial projections here:

  1. Pro Forma Cash Flow Statement – this should show your expected cash inflows and outflows for at least the first year – three years would be better.
  2. Income Projection – a Pro Forma Income Statement should show your projected revenues and expenses for the next three years. Base future years on expected economic and industry trends.
  3. Projected Balance Sheet – what will your assets, liabilities, and net worth look like at the end of the next fiscal year.
  4. Break-Even Analysis – this will show how much revenue you need to generate to cover both your cost of goods sold and administrative expenses.

A good business plan is essential if you need outside funding, but it is invaluable in helping you crystalize your plans for making your company a success.

Fixed Assets

Fixed assets are items that are used in your business’s ongoing operations for longer than a year. These items should not be “expensed” or shown on the Profit and Loss Statement; instead they should be recorded on the Balance Sheet as assets. They are expensed over time through depreciation. Examples of Fixed Assets are:

  • Machinery and equipment
  • Furniture and fixtures
  • Vehicles
  • Computers and Software
  • Land
  • Buildings
  • Building Improvements
  • Leasehold Improvements

Fixed Assets are recorded on the Balance Sheet at the purchase price plus any installation costs needed.  Once a Fixed Asset is put into service, except for land, it begins to lose value. This loss in value is accounted for with Depreciation (for tangible assets) or Amortization (for intangible assets like software).  Depreciation and Amortization are non-cash expenses in that they are included in your Profit and Loss Statement even though there is no cash transaction.

Different Fixed Assets have different useful lives so are depreciated over different periods. There are a number of depreciation methods, but the two of the most common are:

  1. Straight-line depreciation is the simplest. Take the original cost of the Fixed Asset, subtract any expected Residual Value (if you think you will be able to sell the asset once you are no longer using it), and divide the result by the number of years you expect to use the asset.
    • For example, you purchase a computer for $2,000 and expect to use it for three years, after which you think you can sell it for $200. The annual Depreciation Expense will be $600.
    • ($2,000 – $200) / 3 = $600
  2. Unit of Production method us often used for machinery used in production. Take the asset cost less any residual value and divide that by the number of units of production expected from the machine. Then multiply the Per Unit Depreciation expense by the actual number of units produced during that period.
    • For example, you purchase a printing press to print flyers for $10,000 and expect to be able to sell it for $1,000 when you dispose of it. The press will be able to print 100,000 units over its useful life. The per unit of depreciation will be .09 (nine cents).
      • ($10,000 – $1,000) / 100,000 = .09
    • During the first full year of operation, you print 10,000 flyers. The depreciation expense for that year will be $900.

The IRS has rules for fixed assets and depreciation, and those rules can change. It is important to work with an accountant who understands the proper way to classify fixed assets and the most beneficial method of depreciation.

What are Financial Statements and Why Do I Need Them? The Balance Sheet

Many business owners think the terms Income Statement and Financial Statement are interchangeable. The Income Statement is indeed one part of a Financial Statement package, but owners should know there are usually three other statements and why they are important.

There are four basic financial statements are:

  • Income Statement
  • Balance Sheet
  • Statement of Cash Flows
  • Statement of Changes in Equity

Let’s start with the Balance Sheet.

The balance sheet is made up of three sections: Assets, Liabilities, and Equity. The basic accounting equation is Assets = Liabilities + Equity. The balance sheet shows a company’s financial position on a specific date.


Assets are the resources of the company that have been acquired through past transactions and have future economic value. Examples of assets are:

  • Cash in Bank
  • Accounts Receivable (amounts due from customers)
  • Inventory (merchandise for re-sale or materials to be used in production)
  • Prepaid Expenses (items paid in advance like insurance and property taxes)
  • Land
  • Buildings
  • Machinery (used in manufacturing production)
  • Computer Equipment
  • Software
  • Trademarks, Patents, or Copyrights

Assets are classified into distinct groupings.

  • Current Assets are assets that will generally be used within an accounting cycle. They include cash, accounts receivable, inventory, and prepaid expenses.
  • Fixed Assets are items that provide long-term use for the company. Things like land, buildings, machinery, and computer equipment will benefit a company for longer than one accounting cycle.
  • Intangible Assets are those items that are not physical and will last longer than one account cycle, like computer software or trademarks.


Liabilities represent obligations for past transactions that must be paid by a company. Liabilities can be thought of as a source of the company’s assets and claims against those assets. They include:

  • Accounts Payable (amounts due to suppliers)
  • Short-Term Notes Payable (the portion of any loans due within one year)
  • Wages Payable (amounts due to employees but not paid as of the date of the statement)
  • Interest Payable
  • Customer Deposits (advance payments received for work or goods not yet provided)
  • Accrued Expenses (obligations that have been incurred but not yet recorded in Accts Payable)
  • Notes Payable

Liabilities are also classified into groupings:

  • Current Liabilities are obligations that are due within an accounting cycle. Accounts payable, wages payable, customer deposits, and accrued expenses are examples of Current Liabilities.
  • Long-Term Liabilities are obligations that are due over more than one accounting cycle. Notes payable (less the current portion shown in Current Liabilities) are listed here.


The items listed in the Equity section vary, depending on the legal form of the business. Owner’s Equity is used when a company is a Sole Proprietorship; Members’ Equity is used for a Limited Liability Company; Stockholders’ Equity is used for a corporation.

The Equity accounts for a Sole Proprietorship will include:

  • John Smith, Capital
  • John Smith, Draws
  • Net Income (cumulative for the current year)

Equity accounts for an LLC are:

  • Members’ Equity
  • Members’ Draws
  • Net Income

Equity accounts for a corporation include:

  • Common Stock (shows the original cost of the company shares sold to stockholders)
  • Preferred Stock (not every corporation has this)
  • Retained Earnings (the cumulation of net profits/losses from prior years)
  • Net Income

An accountant who understands how to properly classify items on the balance sheet is crucial to having useful financial statements. Staying on top of accounts receivable is essential for good cash flow; knowing how often inventory turns over can help you determine if you are carrying obsolete items; recognizing when an item should be recorded as a fixed asset and when it should be expensed will keep you out of trouble with the IRS.


Cash Basis vs. Accrual Basis Accounting

You may have heard the terms Cash Basis or Accrual Basis, and when you register your business with your state, you will likely be asked which method you plan to use. This is an important decision, but the concepts are not difficult. It is worth the time to understand what the terms mean.

The bottom line is that the Cash Basis and Accrual Basis of accounting are two different methods of recording transactions. The difference between the two is the timing of when Revenues and Expenses are recognized.

The Cash Basis records revenue when cash is received from a customer; expenses are recorded only when cash is paid to suppliers and/or employees. The Cash Basis is the easiest to use of the two methods – there are no payables or receivables to worry about. Another is that taxes are paid only on transactions that have been paid. However, per the IRS the Cash Basis can only be used when a company’s sales are less than $5 million per year.

The Accrual Basis means revenue is recorded when an item is sold or when a service is performed, not when payment is received, and expenses are recorded when the items are used. In other words, revenues are recognized at the time they are earned, Cost of Goods Sold are matched and recorded at the same time, and administrative expenses are recorded when incurred.

Example 1

A company sells 500 widgets for $1,000 to a customer in June. The customer pays the invoice in July. With the cash basis, the sale is recorded in July when the cash payment is received. Under the accrual method, the sale would be recorded in June when the invoice is issued, and an Accounts Receivable would be created. When payment is received in July, the cash is applied to the Accounts Receivable.

Example 2

A company buys $100 of office supplies in September and pays for them in October. Under the Cash Basis, the expense is recorded in October when paid. With the Accrual Basis, the expense is recognized in September when the invoice is received and an Accounts Payable is created.

The consequences of choosing the wrong method can be expensive. I once had a client who had a small retail company and chose the Accrual Method. He was able to get a substantial discount on items for resale, so he actually saved money by purchasing more than he needed. He classified the extra goods in inventory, even though most of those items would never be sold. The correct method would have been to use the cash method and classify all purchases to expense when payment was made. Consequently, he showed higher profits which meant he had a bigger tax bill each year.

Choosing a Business Structure

There are several different legal structures in which you can form your business. The four main types are listed here:

Sole proprietor

A sole proprietor is someone who owns an unincorporated business alone.  Basically, you are your business—there is no separate business entity.  You are automatically considered a sole proprietor if you conduct business but don’t register as any other type of business structure. You are personally responsible for all liabilities of your business.

A business run as a sole proprietorship does not pay separate income tax. The income and deductions of the business are reported on a Schedule C, Profit or Loss from Business which is filed with your Form 1040 each year. You will also need to file Schedule SE, Self-Employment Tax. Additionally, you need to pay estimated taxes on a quarterly basis using Form 1040-ES, Estimated Tax for Individuals. Consult with a tax professional to determine the appropriate estimated tax payments.


A partnership is an agreement between two or more people to participates in a business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

A partnership must report the business income, expenses, gains, and losses from operations on Form 1065, U.S. Return of Partnership Income, but does not pay income tax. Instead, the profits or losses are passed through to the partners, each of whom includes his or her share on his or her Form 1040. Additionally, each partner needs to file Schedule SE, Self-Employment Tax, and pay quarterly estimated income taxes.

There are two common kinds of partnerships: Limited Partnerships (LP) and Limited Liability Partnerships (LLP). Limited Partnerships have only one general partner with unlimited liability, and all other partners have limited liability. The partners with limited liability also have limited control over the company. Profits are passed through to personal tax returns, and the general partner is the only one who must pay self-employment taxes.

Limited Liability Partnerships are similar to Limited Partnerships but give limited liability to every owner. An LLP protects each partner from debts against the partnership in that they aren’t held responsible for the actions of the other partners.

Limited Liability Company (LLC)

An LLC is a business entity separate from the owners, and the owners usually do not have personal liability in case of bankruptcy or lawsuits.  Owners of an LLC are called members; members of an LLC may be individuals, corporations, or other LLCs. Most states allow “single-member” LLCs, and there is not a maximum number of members.

Depending on the number of members and the business considerations, an LLC can be treated as either a corporation, a partnership, or as part of the LLC’s owners tax return (a disregarded entity). A single-member LLC is treated as a “disregarded entity” unless it files Form 8832 and elects to be treated as a corporation. An LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and elects to be treated as a corporation.


A corporation is a separate entity from the owners, who are called shareholders. Corporations provide the strongest protection to its owners from personal liability, but the cost to form and maintain a corporation is higher than other structures.

Any profits of a corporation are taxed separately from the owners. A corporation must file a Form 1120, U.S. Corporation Income Tax Return. Any profits paid to shareholders are called dividends and shareholders must pay income tax on any dividends they take. The corporation does not get a tax deduction when it pays dividends, consequently shareholders face “double taxation.” Additionally, shareholders cannot deduct any losses of the corporation.

S Corporation

An S Corporation is a corporation that elects to pass the business income and deductions through to the shareholders for federal tax purposes. This allows S Corporations to avid the double taxation on corporation income. To qualify for S Corporation status, a corporation must meet the following requirements:

  • Be a domestic corporation
  • Shareholders cannot be partnerships, corporations or non-resident aliens
  • Have no more than 100 shareholders
  • Have only one class of stock


Deciding which business structure to use for your company can be confusing. Consult with a trusted business professional if you are not sure of the best structure for you.

Starting a New Business

Starting a business can be one of the most exciting things you do in your life. You have a great idea and you have figured out a way to make money with it. So let’s get things going!

Fire! Aim! Ready!

Slow down. Some careful thought, foresight, and planning will go a long way to increase your chances of success. A methodical plan of action will help you to fulfill your dream of being your own boss and running a successful business. The steps below are the start to a basic action plan for the beginning stages of your business.

  1. Prepare a Business Plan to clarify your marketing, management, and financial plans. While this task may seem unnecessary and even daunting, especially if you have never seen a Business Plan, this one thing alone will do more to help your business succeed than anything else you can do. A well-thought out Business Plan will help you to crystalize your motives for starting this business, who your competitors are and how you will compete with them, and how much money you will need until the business becomes profitable. (The elements of a solid Business Plan will be detailed in my next blog post.)
  2. Determine how much capital you need to take you through the first two years of business. Following the steps of a sold Business Plan will help you consider all the different factors in projecting cash needs. Identify your sources of capital, whether they include your own savings, partner investments, or loans.
  3. Select a business location. Some businesses can be run from your home or a small office, others might need industrial space, and still others will need a retail-type site. If your business is in the third category, selecting a location is the second most important thing you do. Your location will affect not only the quantity and quality of traffic that passes each day, but different cities have very different taxes, regulations and licensing requirements that should be considered.
  4. Select a business structure that best fits your needs by evaluating tax advantages, legal exposure, and ease of compliance. Whether you operate as a Sole Proprietor, a Limited Liability Company, or a Corporation is entirely your choice, but each structure has different filing and tax aspects that need to be considered. You can consult with a general business attorney, a CPA, or a seasoned accountant to help you with this decision.
  5. Register your business name or trade name. If you are going to operate as a Sole Proprietor, you should register a DBA (doing business as) with your state. If you plan to operate as an LLC or a corporation, you need to verify that your chosen name is not already taken and then it must be registered with the state. When choosing a name, think about whether you plan to have a website and check to see if the matching domain name is available. You might also need to consider trademark possibilities, in which case you need to check with the U.S. Patent and Trademark website.
  6. Register with the IRS to obtain an EIN (employer identification number).
  7. If you expect to collect sales tax from customers, you will need to apply for a sales tax permit from your state.
  8. If you will have employees, you need to register with your state for income tax withholding.
  9. Find out if the city or township in which your business resides requires any kind of business licensing.
  10. Open your business bank account. You will need your EIN and a copy of your Articles to do this. When selecting a bank, consider the convenience of branch locations as well as fees and charges assessed to your account.

These steps may seem daunting, but a seasoned business professional can help walk you through these tasks to make sure you start your business the right way.