The coronavirus pandemic has put government assistance programs into high relief, as many people who never needed them before are having to use them now. Here’s a descriptive list of major government assistance programs for individuals and businesses, with links to where and how to apply.

Key Takeaways

  • Many government assistance programs exist to help provide financial and other assistance during the coronavirus pandemic and other times of need.
  • Programs fall into eight general categories: financial, home rental, homeownership, food, healthcare, retirement, taxes, and small business.
  • Programs may be administered by the federal government alone or in partnership with states.
  • Scammers often prey on individuals in need of assistance and should be reported to the FTC.

Financial Assistance for Individuals and Families

These programs provide benefits in the form of payments, goods, or services to help with basic living expenses if you qualify due to low wages.

Unemployment Insurance (UI)

Unemployment insurance (UI) is a joint federal and state program that pays part of your wages when you lose your job through no fault of your own. The program is run by individual states, each with its own eligibility and filing requirements. Many states let you file online, by phone, or in-person (though the coronavirus pandemic has temporarily halted in-person applications in many places).

Some states provide extended benefits for up to 13 weeks in times of high unemployment. Just because you qualify for regular benefits does not mean you will qualify for extended help.

Pandemic Emergency Unemployment Compensation (PEUC)


The Pandemic Emergency Unemployment Compensation (PEUC) is an emergency program that extends how long a person can collect unemployment insurance benefits. Eligible individuals can receive unemployment benefits for a total of 24 weeks once they’ve exhausted the traditional unemployment insurance. However, the benefits expire on March 14, 2021.

The PEUC was established to help those affected by the coronavirus pandemic and was made law on March 27, 2020, under the CARES (Coronavirus Aid, Relief, and Economic Security) Act.

Please note that the PEUC program had initially allowed only 13 weeks of additional UI benefits and was due to expire on Dec. 31, 2020. However, it was extended to March 14, 2021, and an additional 11 weeks was added to the benefit for a total of 24 weeks.

Pandemic Unemployment Assistance (PUA) 

The Pandemic Unemployment Assistance (PUA) expands unemployment benefits to include self-employed workers, freelancers, independent contractors, and part-time workers. Typically, self-employed workers might not qualify for UI, and the PUA helps to provide them with financial assistance if they were impacted by the coronavirus pandemic in 2020 and 2021. The program had been set to expire on Dec. 31, 2020, but was extended until March 14, 2021.

Federal Pandemic Unemployment Compensation (FPUC)

The Federal Pandemic Unemployment Compensation (FPUC) is a special emergency form of UI that applies to you if you lost your job due to the novel coronavirus pandemic. In addition to regular unemployment benefits, if you qualify for FPUC, you get an additional $300 per week of federal benefits. The funds will be paid each week of unemployment beginning after Dec. 26, 2020, and ending on or before March 14, 2021.

Please note that the original benefit had been an additional $600 weekly under the CARES Act, but that benefit expired on July 31, 2020. In December 2020, the FPUC was modified and extended as part of the Continued Assistance Act. The modified FPUC provides an additional $300 per week in benefits—replacing the $600 weekly benefit.

It's important to note that the FPUC benefit is not payable from July 31, 2020, to Dec. 26, 2020. In other words, the $600 in extra money for unemployment benefits ended on July 31, 2020, and the $300 started after Dec. 26, 2020.

Lost Wages Assistance (LWA) Program

The Lost Wages Assistance (LWA) program, created Aug. 8, 2020, is a federal-state unemployment benefit that provides $300 to $400 in weekly compensation to eligible claimants. The Federal government provides $300 per claimant from the Disaster Relief Fund (DRF), and states are asked to provide the remaining $100.

LWA was in response to the expiration of the FPUC program on July 31, 2020, and designed to offer compensation through Dec. 27, 2020, provided funding continues through that date.

According to reporting by CNBC, the Lost Wages Program ended Sept. 5, 2020, due to the depletion of funds. A FEMA spokesperson said all states and territories that applied by the Sept. 10 deadline would receive six weeks of Lost Wages funding.

Pros of Unemployment Insurance

  • Partial wages until you are rehired or find another job
  • Time to explore new/better employment opportunities
  • Opportunity to pursue education or training in a new career path
  • Possible extended benefits of 11 weeks from Dec. 26, 2020, to March 14, 2021

Cons of Unemployment Insurance

  • Less income than when working (usually)
  • Regular benefits only for 26 weeks
  • No employer-provided healthcare benefits
  • Unemployment benefits subject to income tax

The table below compares eligibility requirements for regular Unemployment Insurance (UI) and Federal Pandemic Unemployment Compensation (FPUC) and the availability of certain benefits.

Type of Unemployment U.S. Citizen Self-Employed, etc. Job Loss Reason Extra 11 Weeks $300 Bonus
Unemployment Insurance (UI) Yes No Not your fault Maybe No
Federal Pandemic Unemployment Compensation (FPUC) Yes Yes COVID-19 Yes Yes

Source: U.S. Department of Labor and CareerOneStop.

Temporary Assistance to Needy Families (TANF)

Temporary Assistance for Needy Families (TANF), also known as welfare, is another federally funded, state-run benefits program designed to help families achieve independence following temporary difficulty. Qualified recipients may receive help with food, housing, home energy, childcare, and job training. TANF recipients must engage in “work activity” as defined by the state.

Each state runs its own TANF program and decides who is eligible. To sign up for benefits, you can apply at your local county social services agency or call your state TANF office for local contact information. Importantly, qualifying for TANF does not disqualify you for other government benefits.

Pros of TANF

  • Provides needed assistance for families
  • Specifically targeted help for children
  • Can supplement income if you are already working
  • Provides job training to encourage independence

Cons of TANF

  • Income to qualify often too low
  • Can create a negative social stigma
  • Uneven coverage due to individual state rules
  • May discourage job seeking

The Social Security Administration (SSA) Benefit Eligibility Screening Tool (BEST) provides an excellent way to determine your eligibility for any benefit administered by the SSA.

Social Security Disability Benefits (SSDI)

Social Security Disability Insurance benefits are paid to people who cannot work for at least one year due to a medical condition or who are expected to die from that condition.

To be eligible, you must:

  • Have worked in a job or jobs covered by Social Security
  • Meet Social Security’s definition of disability
  • Have worked long enough and recently enough to qualify for disability benefits

Additional information about SSDI can be found in the Social Security Disability Benefits brochure. The Social Security Disability Planner helps you determine if you are eligible. If you believe you qualify, you can apply online.

Pros of SSDI

  • Increased monthly income
  • Freezes Social Security earnings record
  • Income possibly tax-free
  • Provides rehab and back-to-work incentives

Cons of SSDI

  • Long time to process and approve SSDI claims
  • Low income
  • Medical Improvement Expected (MIE) status renewable every six months
  • Can cause loss of Medicaid or SSI benefits

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) is a federal income program administered (but not funded) by Social Security. SSI is designed to meet the basic needs of older, blind, and/or disabled Americans who have little or no income. SSI consists of a monthly payment to help with the cost of food, clothing, and shelter and can also include Medicaid coverage as well as food stamps.

SSI qualification requirements, which are spelled out on the SSI eligibility webpage, generally require you to be:

  • 65 or older
  • Blind
  • Disabled

In addition, you must:

  • Have limited income
  • Have limited resourcesBe a U.S. citizen or national or in one of certain categories of aliens

The SSI Application Process webpage explains how to apply and includes an extensive How Someone Can Help You With Your SSI section.

Pros of SSI

  • Benefits set at federal level, not state
  • Can qualify for Medicaid and food stamps on SSI
  • No prior work history required
  • May also qualify for concurrent Social Security

Cons of SSI

  • Eligibility negatively affected by living arrangements
  • Significant documentation needed to qualify
  • Claims and appeals process often slow
  • Significant asset restriction rules

The table below compares Temporary Assistance to Needy Families (TANF) with both Social Security Disability Benefits and Supplemental Security Income (SSI) in regard to eligibility.

Program Low
Income
Family 65 or Older,
Blind, or
Disabled
U.S.
Citizen/Eligible Noncitizen
Work Requirement
TANF Yes Yes None Single adult/couple with no children: No
Families with children: Yes
Yes
SSDI No No Disabled Yes Yes
SSI Yes No Any Yes No

Source: USA.gov and Social Security Administration.

Student Financial Aid

The Free Application for Federal Student Aid (FAFSA) is the government access point for all forms of student financial aid, including grants and scholarships, student loans, and work-study programs. These programs provide financial help to college students with demonstrated financial need.

Eligibility is based on:

  • Financial need
  • Being a U.S. citizen or an eligible noncitizen
  • Maintaining good standing on your federal student loans
  • Acceptance into an eligible degree program
  • Maintaining adequate academic progress

Additional requirements can be found on the Federal Student Aid webpage. The Federal Student Aid Application Process begins with FAFSA.

Pros of Student Financial Aid

  • Helps to pay for college
  • Deferment for federal loans
  • Opportunity to attend better colleges
  • Creates good credit for loans paid on time

Cons of Student Financial Aid

  • Loan repayment required
  • Lifetime limits on Pell grants
  • Private loans more expensive and restrictive
  • Defaulting on loans hurts credit

Due to the coronavirus pandemic, student loan payments—including principal and interest—on federally held student loans have been automatically suspended through Sept. 30, 2021. However, the suspension only applies to federal student loans held by the Department of Education.

Also, the Department of Education stopped the collection of defaulted federal student loans—meaning loans in nonpayment. As a result, garnishment of wages and any offset of tax refunds and Social Security benefits have also been stopped through Sept. 30, 2021.

Subsidized Rental Housing

Three forms of subsidized rental housing exist: Privately Owned Subsidized Housing, Housing Choice Voucher (HCV) Program (formerly Section 8), and HUD public housing. With privately-owned housing, you find the housing and apply at the rental office. You can search for housing at resources.HUD.gov. With Housing Choice, you find your own apartment or house, and then the government pays the amount for which you qualify, with you paying the difference.

HUD public housing, often used by people who don’t qualify for Section 8 housing, requires you to rent from a local public housing authority based on your income. Wait times for both Section 8 and public housing programs may be long, depending on where you are applying.

To be eligible for Privately Owned Subsidized Housing, you must:

  • Be within the income limit for your location and size of your family
  • Meet other requirements set by the property owner

To be eligible for Housing Choice or HUD public housing, you must:

  • Be a family, senior citizen, or have a disability
  • Fall within program income limits
  • Be a U.S. citizen or eligible noncitizen

As noted above, apply for privately owned housing at the rental office. For the other two programs:

  • Contact the local Public Housing Agency (PHA)
  • Complete an application (income, family size, employer, bank)
  • Provide documentation (photo ID, birth certificates, tax returns

Pros of Subsidized Rental Housing

  • Below-market rental rates
  • Benefit of government oversight
  • Opportunity to save for something better
  • Programs allow for choice

Cons of Subsidized Rental Housing

  • Can deplete city resources and services
  • Some of the existing housing located in areas with high crime rates
  • Difficult to qualify
  • Long waiting lists

The table below compares all three housing programs and requirements for each.

Program Low Income Family/
Senior/
Disabled
U.S. Citizen/
Eligible
Noncitizen
You Find
Private Subsidized Yes No No Yes
Housing Choice Voucher (HCV) Yes Yes Yes Yes
Public Housing Yes Yes Yes No

Source: USA.gov.

Home Ownership Programs

The Department of Housing and Urban Development (HUD) has several programs designed to help you purchase a home if you qualify.

FHA Loans

One part of HUD, known as the Federal Housing Administration (FHA), insures mortgages, which makes it easier for buyers to become homeowners thanks to less-strict eligibility requirements. The program is popular with first-time homebuyers but not limited to them.

Eligibility for an FHA loan depends, in part, on your ability to post a down payment of 3.5% of the purchase price and having a credit score of at least 580. You must also make sure the home is priced within the loan limit for an FHA home in its location

To apply for an FHA loan, you must find an approved FHA lender, as the FHA doesn’t actually lend the money. If you have good credit and the ability to pay 10% to 15% down, you may find a conventional loan is less expensive than an FHA insured loan.

Home Ownership Vouchers

The HUD Homeownership Voucher Program lets low-income families in the HCV program, including those in public housing, use their vouchers to meet monthly mortgage payments and other expenses when buying a home for the first time. Contact your local Public Housing Agency (PHA) to find out if your PHA offers this program.

Programs for Active Duty Service Members and Veterans

The Department of Veterans Affairs (VA) offers home loan programs to active duty service members, surviving spouses, and veterans. VA loans are provided by private lenders, with the VA guaranteeing a significant portion of the loan. A certificate of eligibility (COE) is required and can be applied for through the Veterans Administration.

Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report to the Consumer Financial Protection Bureau or with the U.S. Department of Housing and Urban Development (HUD).

State Programs

In addition to housing programs administered by the federal government, state housing finance agencies and state HUD offices offer special programs as well.

HUD also funds counseling agencies nationwide that give advice on topics related to housing, including buying a home.

This table compares basic eligibility requirements for various government homeownership programs, including FICO credit score and debt-to-income ratio requirements.

Program FICO Credit Score Debt-to-Income Ratio Primary
Residence
FHA 500 or higher 50% or less Yes
Housing Choice Voucher (HCV) PHA decision PHA decision Yes
Active Duty/Veterans 620 by lender 41% Yes

Source: U.S. Department of Housing and Urban Development, Consumer Financial Protection Bureau, U.S. Department of Veterans Affairs

Pros of Government Home Ownership Programs

  • Low or no down payment
  • Lower credit score to qualify
  • No mortgage insurance (VA)
  • Especially helpful for first-time buyers

Cons of Government Home Ownership Programs

  • Higher mortgage insurance costs (except VA)
  • Restrictive government property standards
  • Limited to primary residence
  • Not competitive with multiple offers

Foreclosure or Eviction

If you are facing foreclosure or eviction as a result of the coronavirus, government help is available. Renters can get assistance from the federal, state, and local governments, mostly through a moratorium on evictions.

Homeowners facing foreclosure can get help as well. Some programs, such as those through the CARES Act, are specific to the coronavirus emergency. Others have been around, including many available at state and local levels.

If your mortgage is backed by a government program, a moratorium on foreclosures and evictions has been put into place for those impacted by COVID19. The moratorium was due to expire on Jan. 31, 2021, but was extended. However, the extension expiration dates vary, depending on the government agency that is backing the mortgage loan.

For those who are looking to request forbearance, the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture have extended the date for which borrowers can request forbearance. The mortgage payment forbearance enrollment window will continue until June 30, 2021.

Fannie Mae and Freddie Mac Loans

For mortgage loans backed by Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) have extended the foreclosure moratoriums on single-family foreclosures and real estate owned (REO) evictions until Mar. 31, 2021. REO properties are bank-owned properties that were seized as a result of default.

USDA-Backed Loans

For mortgage loans backed by the U.S. Department of Agriculture (USDA), the USDA has extended the foreclosure moratorium for its Single-Family Housing Direct and Guaranteed loan program until June 30, 2021.

HUD Loans

The U.S. Department of Housing and Urban Development (HUD) insured by the Federal Housing Administration (FHA) or guaranteed by the Office of Native American Programs (Section 184 and 184 A loan guarantee programs) were extended through June 30, 2021.

Please check with your mortgage lender, bank, or service provider—or the company that collects your mortgage payments—to determine if your loan qualifies for the moratorium program.

VA Loans

The expiration date for the eviction and foreclosure moratorium of VA loans from the Department of Veteran Affairs has also been pushed out until June 30, 2021.

Food

From emergency food needs to ongoing nutrition assistance, the federal government, in partnership with states, offers free and low-cost food programs for families and individuals. Some programs have changed the rules during the coronavirus emergency.

Immediate Aid

If you need food quickly, the U.S. Department of Agriculture (USDA) maintains a National Hunger Hotline—866-3-HUNGRY (866-348-6479)—with information and eligibility requirements available in English and Spanish. The hotline, which will connect you with emergency food providers, government programs, and social service agencies, operates Monday through Friday from 7 a.m. to 10 p.m. ET.

Supplemental Nutrition Assistance Program (SNAP)

SNAP (previously known as food stamps) helps needy families supplement their food budget in order to move toward self-sufficiency. Eligibility is determined by individual states that administer the program. You apply in the state where you live by contacting your state agency. Some states allow online applications, while others require your physical presence. However, see special Coronavirus Food Program Waivers below.

Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)

WIC provides low-income women and their young children healthy food, nutrition counseling, and referral to health, welfare, and social services agencies. WIC is a federal grant program administered by the government through 90 WIC agencies and approximately 47,000 WIC retailers.

To be eligible, the mother must be pregnant, nursing, or postpartum (up to six months after birth) with infants (up to one-year-old) or children (under the age of five years). There are additional income requirements posted on the WIC FAQ webpage.

School-Age Children

Programs for school-age children include the National School Lunch Program (NSLP), the School Breakfast Program (SBP), and the Summer Food Service Program (SFSP). Eligibility requirements for all three programs are the same. If your family income falls below 130% of the federal poverty guidelines, your child is entitled to free food. If income is between 130% and 185% of guidelines, prices for meals are reduced.

Seniors

The federal government sponsors two programs designed to get food to low-income seniors. The Senior Farmers’ Market Nutrition Program (SFMNP) offers coupons to purchase fresh fruits, vegetables, honey, and herbs at farmers’ markets, roadside stands, and farms.

The Commodity Supplemental Food Program (CSFP) provides healthy food on a monthly basis. You must be 60 years of age or older and live in an area that offers either program in order to apply. Both programs have income limits. For more information, use the USDA State Contacts List.

Pros of Government Food Programs

  • Provide nutritional food at no cost
  • Improved dietary intake for vulnerable populations
  • Reduced food insecurity for school children
  • Reduced medical costs for adults, children, and seniors

Cons of Government Food Programs

  • Social stigma for recipients
  • Consistency and quality of state-run programs vary
  • Limitations on what products can be purchased
  • Mandated work requirements difficult for adults with children

The table below lists eligibility requirements for federal food programs.

Program Eligibility
SNAP Must meet state guidelines
WIC Women: Pregnant, breastfeeding, or due in under six months
Children: Under five years old
Must meet additional WIC requirements
NSLP, SBP, and SFSP Less than 130% of poverty guidelines = free meals
130% to 185% of poverty guidelines = reduced price meals
Seniors 60 or older
Must meet state guidelines

Source: USA.gov

Coronavirus Food Program Waivers

The USDA has granted states flexibility with the administration of several food programs during the coronavirus emergency. This flexibility includes:

Additional coronavirus-related steps taken by the USDA include:

Healthcare

Six major government healthcare programs provide medical coverage for low-income and older Americans, children, veterans, and those who have recently lost their jobs.

Medicare

Medicare is the main healthcare option for those 65 and older. If you are still working and covered by employer health insurance when you are three months away from your 65th birthday, discuss your Medicare options and requirements with your human resources office. You can also consult Applying for Medicare Only on the Social Security website. If you are applying for Social Security and Medicare simultaneously, use the link under Social Security below.

ACA Health Insurance Marketplace

Healthcare.gov is home to the Health Insurance Marketplace, created by the Affordable Care Act (ACA), an Obama administration program designed to provide affordable health insurance to uninsured Americans. Anyone who doesn’t have health insurance can obtain coverage through the Marketplace. Those who fall below certain income limits can receive subsidies that lower the cost of coverage.

Normally, the Marketplace has an annual enrollment period to obtain or change coverage. The next regular enrollment period will be from Nov. 1, 2020, through Dec. 15, 2020. However, if you lost your job, had your hours reduced, or were furloughed due to the coronavirus pandemic, you may qualify for a special enrollment period to obtain coverage or change your plan.

Medicaid and CHIP

Medicaid and the Children’s Health Insurance Program (CHIP) are related but have slightly different requirements. Medicaid is for low-income families and individuals. CHIP is for dependents under age 19 whose parents earn too much to qualify for Medicaid but not enough to pay for private health insurance coverage.

Both programs are federally funded in part and run at the state level. Each state has its own rules but must follow federal guidelines. You can apply for Medicaid and CHIP through the ACA Health Insurance Marketplace or through your state Medicaid agency.

Veterans Administration Healthcare

The primary criteria to receive VA healthcare benefits require that you be a military veteran or former member of the National Guard or Reserves who served on active duty and was not dishonorably discharged. Specific eligibility depends on when you served and for how long. The rules are complicated but well explained on the Department of Veteran Affairs Eligibility webpage.

COBRA

Coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) is mandated by federal law for employees (and their dependents) when they lose their job or experience a reduction in work hours. One huge downside to COBRA coverage is cost. When you lose your job, whatever your employer paid toward your health insurance goes away, and you have to pay the entire amount.

You have 60 days from job loss or reduction in hours to decide whether to accept COBRA coverage, which can last from 18 to 36 months, depending on the circumstances behind your job loss.

Pros of Government Healthcare Programs

  • Improve public health
  • Stop medical bankruptcies for vulnerable populations
  • Boost the economy due to savings
  • Human rights issue

Cons of Government Healthcare Programs

  • Increases government debt
  • Potential for abuse
  • Reduces competition
  • Long wait times for service

State Health Department Programs

State health departments offer programs in addition to those available at the federal level. Use the USA.gov State Health Departments link to find out what is offered in your state, information about eligibility requirements, and how to apply.

Retirement

The primary government retirement programs are Social Security, for most citizens 65 and over who qualify through their work history, and the Federal Employee Retirement System (FERS), for certain government employees not covered by Social Security.

Social Security

Most people are familiar with Social Security and the fact that you apply for benefits at a certain age, depending on when you were born and whether you want to receive partial or full benefits. You can apply for benefits for yourself or as a spouse if you meet the following four requirements:

  • You are at least 61 years and nine months old.
  • You are not currently receiving Social Security on your work record.
  • You have not already applied for benefits.
  • You want benefits to start no more than four months in the future.

You can also apply for Medicare when you apply for Social Security if you are within three months of age 65.

Federal Employees Retirement System (FERS)

FERS, which replaced the Civil Service Retirement System (CSRS) in 1987, provides benefits to civilian government workers through three programs: a Basic Benefit Plan, Social Security, and the Thrift Savings Plan (TSP).

Eligibility for FERS benefits is determined by your age and number of years of service. The CSRS and FERS Planning and Applying website provides complete information depending on how close you are to retirement.

Taxes

The Internal Revenue Service (IRS) sponsors several tax-assistance programs to make federal and, in some cases, state tax filing easier and free.

Free File

If your adjusted gross income is $69,000 or below, you can file federal and, in many cases, state returns online at no cost to you. The process and what you need to have to file are all explained in this FreeFile Infographic. Get help choosing a product using the FreeFile Online Lookup Tool.

With income above $69,000, you can still use the FreeFile Fillable Forms tool to prepare your taxes, as long as you are comfortable with doing your own taxes and don’t require assistance. The fillable forms tool lets you file electronically but does not include state forms.

VITA and TCE Tax Filing Assistance Programs

The IRS has two in-person tax assistance programs: the Volunteer Income Tax Assistance (VITA) program and Tax Counseling for the Elderly (TCE). Both offer free tax-preparation assistance to qualified individuals. VITA generally applies to you if your income is $56,000 or less, you are disabled, or you have limited English-speaking skills. TCE is for citizens aged 60 or older.

You can find VITA and TCE program sites using either the IRS TCE/VITA Locator Tool or the AARP Tax-Aid Site Locator Tool.

Due to the coronavirus pandemic, all TCE sites and many VITA sites are closed until further notice. Use the VITA Locator Tool to find out if a site near you is open.

IRS People First Initiative

With the challenges of the coronavirus in the news, the IRS recently launched a program known as the People First Initiative, which consists of a number of steps designed to provide relief on payment and postponing certain compliance actions. This initiative is in addition to the extended tax filing and payment deadline of July 15, 2020. Additional information can be found on the IRS People First Initiative FAQ webpage.

Financial Assistance for Small Business

Small businesses are the beneficiaries of several long-standing government assistance loan programs, most of them originating from the Small Business Administration (SBA). In addition to the historical help these programs have provided, many also now offer special coronavirus-related assistance.

Small Business Administration (SBA)

Many owners of SMBs know about the main SBA loan programs, especially considering all the publicity the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs have received.

Paycheck Protection Program (PPP)

The SBA, in consultation with the U.S. Treasury Department, announced on Jan. 13, 2021, that they have re-opened the Paycheck Protection Program (PPP). The PPP was created to provide funds to companies with the financial hardship that has resulted from the coronavirus pandemic. Typically, the loans must be paid back within two-to-five years. PPP loans can be forgiven if employee retention criteria have been met. As a result of the Consolidated Appropriations Act, 2021 (CAA), signed into law by former president Trump on Dec. 27, 2020, $284 billion in new funds has been injected into the PPP program.  

As of Jan. 19, all participating lenders—such as community and commercial banks—are able to lend out money to both first-time and second-time applicants. The money can be used toward job retention and other expenses through March 31, 2021. The program also allows certain existing PPP borrowers to apply for a second loan—called a Second Draw PPP Loan.

Additional changes announced Feb. 22, 2021 by the Biden administration provide a temporary two-week window for very small businesses to apply for PPP relief ahead of other, larger companies. These changes also change loan calculation rules to make it easier for sole proprietorships to obtain more funding and expand eligibility to include those with non-fraud related felonies, delinquent student loans, and non-citizens including Green Card holders and those here on visas.

Economic Injury Disaster Loan (EIDL)

The deadline to apply for the Economic Injury Disaster Loan (EIDL) program as a result of the COVID-19 Pandemic has been extended to Dec. 31, 2021. EIDL loans are designed to meet the financial obligations and operating expenses of small businesses with a payment schedule that can last as long as 30 years. Unlike PPP loans, the EIDL funds must be paid back and are not forgiven.

Also, the program's ability to offer loans is subject to the availability of funds. In other words, once the money that was allocated to the program runs out, there will be no more loans.

Some of the program’s benefits include: 

  • Affordable terms: A 3.75% interest rate for small businesses and a 2.75% interest rate for nonprofit organizations
  • A loan maturity of 30-years maturity 
  • An automatic deferment of one year before monthly payments begin

However, the SBA has much more to offer than coronavirus relief. Other SBA loan programs include the SBA Express Bridge Loan, SBA Debt Relief, and more, including access to funding to launch, manage, and grow your business. Full details, including eligibility, can be found on the SBA home page.

U.S. Department of Agriculture (USDA)

The USDA offers a number of programs aimed at all sectors of the agricultural community. Programs include farm loans, housing assistance, loans and grants for rural economic development, loans for beginning farmers and ranchers, livestock insurance, and more. Detailed information on all USDA programs, including how to apply, can be found on the USDA Grants and Loans program webpage.

As a reminder, for mortgage loans backed by the U.S. Department of Agriculture (USDA), if you're facing foreclosure, the foreclosure moratorium was extended until March 31, 2021, for eligible loans.

Small Business Lending Fund

The Small Business Lending Fund (SMLF), created as part of the Small Business Jobs Act of 2010, is a dedicated fund that provides capital to community banks and community development loan funds (CDLFs) to encourage those organizations to lend to small businesses. Information about this fund, including the location of lending institutions near you, can be found on the U.S. Treasury Small Business Lending Fund website.

Pros of Government Business Programs

  • Low interest rates
  • Favorable repayment terms
  • Less collateral needed
  • Low or no down payments

Cons of Government Business Programs

  • Loan amount may be small
  • Long approval process
  • Personal guarantee often required
  • Good credit usually required

Watch out for Scams

People looking for government assistance sometimes come across ads for “free government grants.” However, the government does not award grants to individuals, only to states, universities, and other organizations. Anyone who suggests otherwise is probably running a scam. If you receive such an offer, the Federal Trade Commission (FTC) suggests the following dos and don’ts:

  • Do write down the phone number.
  • Do register at the National Do Not Call Registry.
  • Do file a complaint with the FTC.
  • Don’t give out bank account information.
  • Don’t pay out any money.
  • Don’t believe a caller or an email just because of a claim to be from the government