As the Association of Washington Business writes, small businesses may apply for the federal Paycheck Protection Program (PPP) beginning tomorrow. These forgivable loans were funded in the third federal aid bill and are meant to be used for payroll and other costs (more details here).

Startups may not be eligible for these loans, according to the Congressional Research Service:

Despite directly employing 500 or fewer employees, some startups (and other small businesses) might be ineligible for PPP loans because of the SBA’s “affiliation rules.” . . .

Under the SBA’s affiliation regulations, an investor could be deemed to have “control” of multiple businesses, thereby making all of the affiliated businesses under that investor’s control ineligible for SBA assistance if they, in the aggregate, are too “big” to be eligible. Control can be determined in a number of ways . . . .

Note though, that there are some exceptions to the affiliation rules, including for franchises.

Meanwhile, the New York Times writes about how startups are faring during this time:

Start-ups have always been risky, designed to grow fast or die, but the coronavirus pandemic is turbocharging Silicon Valley’s natural selection and causing a shake-up so sudden it has defied comparison. In just a few weeks, more than 50 start-ups have cut or furloughed roughly 6,000 employees, according to a tally by The New York Times. Plans for initial public offerings are on hold. And funding is drying up for many young tech companies.

Seattle startups are facing these challenges too.