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What Illinois Small Businesses Should Know about State Loan and Grant Programs During the COVID-19 Health Emergency

Posted on in BGL Law

What Illinois Businesses Should Know

A.  Introduction

The cornerstone of federal legislation for small business relief is the CARES Act Paycheck Protection Program (“PPP”). 

The CARES Act set aside $349 billion for government-guaranteed loans for small businesses, to cover eight weeks of payroll and other expenses.

However, despite PPP loans having only been made available as of April 3, 2020, the program was on track to exhaust its initial allocation of nearly $350 billion by the early morning hours of Thursday, April 16, 2020, with the SBA announcing that it had approved more than 1.5 million loans valued at more than $324 billion as of late Wednesday, April 15, 2020, with more loans continuing to be processed.  Meanwhile, Congress had already begun days before the wrangling over additional PPP funding.

            Because of the difficulties already faced with implementation of PPP loans, however, businesses should also be mindful of PPP in context of other financial relief programs:

1).        Loan programs, including: (a) the SBA Economic Injury Disaster Loan Program to small businesses affected by COVID-19; (b) subsidies for existing SBA loans; and (c) SBA Express Bridge Loans;

2).        Families First Coronavirus Response Act payroll tax credits to certain small to mid-size employers, to reimburse the cost of providing coronavirus-related leave to employees;

3).        Business tax relief;

4).        Chapter 11 Bankruptcy relief; and

5).        State relief programs, such as he Illinois Treasury announced the Illinois Small Business COVID-19 Relief (“ISBCR”) Program, under which the State Treasurer has made up to $250 million in deposits available to assist Illinois small business and non-profit entities negatively affected by the COVID-19 pandemic. 

The attorneys at Botto Gilbert Lancaster, LLC, are experienced in all aspects of business planning and litigation, to assist business in navigating through the rapidly evolving landscape of business laws, rules and regulations as the Nation deals with the COVID-19 health emergency – and beyond. 

For further information, or legal and practical guidance on these subjects, contact Botto Gilbert Lancaster, PC, at (815) 338-3838, or by email

B.  Illinois Relief Programs Outside the CARES Act and FFCRA

1.         Illinois loan and grant programs for small businesses.

a).        Illinois Small Business COVID-19 Relief (“ISBCR”) Program.

Pursuant to the Illinois Small Business COVID-19 Relief (“ISBCR”) Program, the Illinois State Treasurer has announced the availability of up to $250 million, to be made available to financial institutions throughout the state, at near-zero rates, to assist Illinois small business and non-profit entities negatively affected by the COVID-19 pandemic. 

The Illinois Treasurer announced a goal of working with “approved financial institutions to provide loans -- either lower rate loans, or loans to a business or non-profit that would not otherwise qualify -- to Illinois small businesses impacted by the COVID-19 pandemic.”

Eligible Illinois businesses or non-profits must: (1) have been shut down or impaired in their operations due to COVID-19; (2) have less than $1 million in liquid assets, or $8 million average annual receipts (per SBA standards); and (3) be headquartered in the state of Illinois or agree to use the funds in Illinois.

ISBCR loans are available to “provide bridge funding, pay fixed debts, payroll, accounts payable and other bills.”

Interest on ISBCR loans is not to exceed 4.75%.

b).       Illinois Small Business Emergency Loan Fund

The Illinois Department of Commerce & Economic Opportunity (“DCEO”) and the Illinois Department of Financial and Professional Regulation (“IDFPR”) are partnering with Accion (a non-profit entity), the Illinois Bankers Association and the Community Bankers Association of Illinois to create the Illinois Small Business Emergency Loan Fund (“ISBELF”).

Loans will be supported by a $30 million loan loss reserve, consisting of $20 million from DCEO funds and $10 million in funds secured with the partnership with the Illinois banking community.

This $60 million fund will support low-interest loans of up to $50,000.00 for small businesses in every industry.

Businesses with fewer than 50 employees and less than $3 million in revenue in 2019 will be eligible to apply.

ISBELF loans are to be deferred for 6 months, and then repayable in fixed amounts at 3% interest for the remainder of a 5-year loan term.

c).        Illinois Downstate Small Business Stabilization Program

The Illinois Downstate Small Business Stabilization Program (“IDSBSP”) is another DCEO-enabled program.  IDSBSP is designed to support small businesses in suburban and rural counties across Illinois.

The program is funded with $20 million, to provide grants of up to $25,000.00 to small businesses in communities served by DCEO's Office of Community Development with substantial low-to-moderate income populations.

These grants are available to businesses with up to 50 employees in municipal and county regions designated for HUD Community Development Block Grants (for which most communities throughout Illinois are eligible) to obtain the grants for working capital.

The program redeploys Community Development Block Grant funds to support local small businesses.

d).       Illinois Hospitality Emergency Grant Program

The Illinois Hospitality Emergency Grant Program (“IHEGP”) has set aside $14 million for grants to assist hospitality businesses with working capital for essential expenses like payroll and rent – and for job training and technology to support shifts in operations, like increased pick-up and delivery.

IHEGP grants are available as follows:

Bars and restaurants that generated between $500,000.00 and $1 million in revenue in 2019 are eligible for up to $25,000.00;

Bars and restaurants that generated less than $500,000.00 in revenue in 2019 are eligible   for up to $10,000.00; and

Hotels that generated less than $8 million in revenue in 2019 are eligible for up to $50,000.00.

 The program repurposes job training and tourism promotion funds to provide this emergency grant assistance.

DCEO has partnered with Accion to administer the grant program and distribute grant awards on behalf of DCEO.

2.         Illinois tax programs.

Illinois has delayed its income tax filing deadline from April 15 to July 15.

Illinois Department of Revenue is waiving for two months all penalties and interest for late payments by registered Illinois retailers operating small eating and drinking establishments for sales taxes that are due for the February, March, and April 2020 reporting periods.

Eligible taxpayers are those operating eating and drinking establishments that incurred a total sales tax liability of less than $75,000.00 in the 2019 calendar year.

Illinois State Bar Association State Bar of Wisconsin Crystal Lake Chamber of Commerce Illinois Trial Lawyers Association McHenry County Bar Association
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