A quick scroll through your social feed will leave your head spinning with acronyms like SBA, PPP, EIDL, and CARES. Our email inboxes are full of “COVID Guides” that have left us with more questions than answers. At SeedInvest, our goal is to help our 200+ portfolio companies and entrepreneur community navigate the noise and tackle the unique financing challenges imposed by the economic shutdown. We may not be experts, but we’re partnered with some great people who are.
What’s going on
On March 27th, 2020 the President signed into law H.R. 748, known as the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) Act. The bill is designed to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic. Included in the bill are several founder-friendly measures including loans, grants, and changes to current policy that will directly impact and hopefully assist you. Below is a quick overview of what these measures could mean for you.
SBA Economic Injury Disaster Loans & Grants (“EIDL”)
Up to $2M loans available to pay for expenses that could have been met had the COVID-19 pandemic not occurred, including:
- Payroll costs including paid sick leave to employees.
- Increased costs due to supply chain interruptions.
- Rent or mortgage payments.
- Obligations that cannot be met due to revenue losses.
- 100% forgivable $10k cash advance within three days of applying.
SBA Paycheck Protection Program (“PPP”)
- Up to $10M loans for businesses with fewer than 500 employees to keep your employees on payroll.
- Use this handy estimator tool from Joust to find out how much you’re eligible to receive.
- The loan is 100% forgivable if used for qualified expenses incurred in the eight weeks following loan origination.
- Keep in mind applying through multiple lenders may trigger a fraud alert.
How we’re helping
We’ve teamed up with the best companies to provide a menu of short and long-term financing solutions. You can learn more about some helpful resources below.
Paycheck Protection Program: Rho Business Banking
- Rho Business Banking is a New York-based, full-service, end-to-end platform comprised of commercial banking and corporate cards. Their clients range from startups all the way to established middle-market companies.
- Rho is helping clients and friends access their network of SBA lenders to complete and file PPP applications. If your primary bank relationship doesn’t support you, fill out their inquiry form and they will pair you with whichever lender in their network is moving applications through fastest.
Paycheck Protection Program: Radius Bank
- Radius Bank is a leading online bank and preferred SBA Lender processing PPP loans to meet the needs of businesses nationwide.
- You do not need to have a Radius checking account in order to apply but, if approved, a Radius checking account is the quickest way to receive your funds. If you choose to open one, use the “SeedInvest” Promo Code to waive the $10 per month fee for balances under $5k.
- Apply for the PPP program using “SeedInvest” as your referral code.
Growth Capital For Online Businesses: Clearbanc
- Clearbanc provides non-dilutive capital to fund repeatable, measurable, and predictable growth (e.g., digital ad spend) for high growth businesses. They offer equity-free funding from $10K to $10M and can make decisions in days.
- To date, Clearbanc has funded over 1,000 companies and invested $150M last year, and are on track to deploy $1B in 2020.
- Their capital is structured as a non-dilutive revenue share – they charge a small fee and founders pay it back via a percentage of sales. There are no liens, no personal guarantees, no covenants, no credit requirements, no MAC clauses, and no warrants.
Corporate Cards: Brex
Brex is a corporate card designed specifically for tech companies. With 10-20x higher limits than traditional cards and a rewards program tailored for startups, Brex makes every dollar you’ve raised go further with no personal guarantee attached.
- 10-minute online application.
- No personal guarantee and 10-20x higher limits than traditional cards.
- Rewards multipliers designed specifically for startups.
- Up to $100k in AWS credits.
- Signup through the SeedInvest partnership page for waived card fees for life and priority partner onboarding.
- For more information, email firstname.lastname@example.org.
What we do
SeedInvest is an investment platform connecting entrepreneurs with our community of over 300k investors, who have collectively funded $200M+ into over 200 offerings. If you’re interested in raising $500k+ via preferred equity or convertible debt, feel free to apply here. We only facilitate investments into companies that satisfactorily complete our independent vetting and due diligence process, which at present represents approximately ~2% of the applications we receive annually.
The information included is a summary for educational purposes only and should not be construed as legal or financial advice on any subject matter. Any information contained herein is not intended to be a substitute for legal or financial advice by your own attorney, accountant, and/or financial advisor. Although care has been taken in preparing the information provided to you, we cannot be held responsible for any errors or omissions, and we accept no liability whatsoever for any loss or damage you may incur. Always seek financial and/or legal counsel relating to your specific circumstances as needed for any and all questions and concerns you now have, or may have in the future. We cannot predict and we do not guarantee that you will attain a particular result, and you accept and understand that results differ for each individual. SeedInvest has not reviewed all of the links provided herein and is not responsible for any content outside of our website. Clicking on hyperlinks and visiting any such pages is done at your own risk.
This post was written by Megan Ananian on April 22, 2020
Financing in the Time of COVID-19