Coronavirus Small Business Relief
The CARES Act tasks the Small Business Administration with overseeing the distribution of millions of dollars in loans and grants to help small businesses survive the pandemic. It also provides additional funding for SBA’s Resource Partners to provide advice and training to help small businesses respond to the unprecedented challenges in communities throughout the country.
The Small Business Commitee has a guide with more information that can help you determine which program is best for your small business.
Paycheck Protection Program
What is the Paycheck Protection Program (PPP)?
A new $350 billion loan program at SBA for small businesses, self-employed, and gig workers to help them from going under due to the COVID-19 pandemic. If employers maintain payroll, the loans would be forgiven.
Who is Elegible?
- Any business concern, 501 (c) (3) organization, veteran’s organization, or tribal business concern that employs no more than 500 employees (or the size standard in a number of employees established by the Administration for the industry in which such business operates)
- Sole proprietors
- Independent contractors
- Self-employed individuals
How Does the Process Work?
All current 7(a) lenders are eligible lenders. Plus, the Department of Treasury will authorize new lenders to help expedite the processing and delivery of capital to small businesses.
How Can I Apply?
Interested borrowers are also encouraged to inquire with a local 7(a) lender regarding whether they are participating in the PPP.
The maximum size of the loan is 250% of an employer’s average monthly payroll cost during the period Feb. 15, 2019 to June 30, 2019, capped at $10 million.
How can I use it?
- Employee compensation, including: salaries, wages, commissions, or similar compensation; cash tips or equivalents; vacation, parental, family, medical, or sick leave; payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes.
- Any compensation or income of a sole proprietor or independent contractor no greater than 8100,000 in one year
- Payment of Interest on mortgage obligations,, rent. utilities, and Interest on pre-existing debt obligations
Why a PPP Loan?
- Waives guarantee and annual fees to keep costs low
- Waives credit elsewhere requirement, personal guarantee requirement, and collateral requirements to expedite the loan approval process
- Defers repayment of principal, interest, and fees for 6 months to give small businesses time to get through the crisis
- Forgives loans if employers maintain their payrolls
What is an Economic Injury Disaster Loan (EIDL)?
A low-interest, fixed rate loan that can provide up to $2 million in assistance for small businesses that can be used to pay immediate expenses during an emergency.
What is an EIDL Grant?
The CARES Act creates a new $10 billion grant program, leveraging SBA' s Office of Disaster Assistance, to provide small businesses with quick, much-needed capital.
Who is Eligible?
- Private nonprofit organizations, small agricultural cooperatives
- Businesses; cooperatives; ESOPs; and tribal business concerns with 1500 or fewer employees
- Independent contractors
- Sole proprietors (whether or not self-employed)
How does the process work?
- Eligible applicants who apply for an EIDL may request up to $10,000 be immediately disbursed. The amount need not be repaid, regardless of the loan decision.
- EIDL borrowers may apply for the Paycheck Protection Program, but when determining loan forgiveness, the advance EIDL grant is taken into consideration.
How can I apply?
There are a couple of ways to apply. The SBA bas an online portal where small businesses can upload documents and apply for a loan, or they can download the PDF on the agency's website and mail the forms.
A million small businesses are eligible to receive up to $10,000.
How long will the process take?
The legislation requires SBA to disburse the funds within three days of receiving the application.
How Can it be Used?
- Any allowable purpose under the DDL program
- Provide paid sick leave, maintain payroll, and meet increased costs
- Make rent or mortgage payments, and repaying unmet obligations.
The U.S. Small Business Administration and the Department of Treasury have made the following COVID-19 loan resources available to you:
- Small Business Guidance and Loan Resources Summary
- Economic Injury Disaster Loan Application
- Information on the Paycheck Protection Plan
- Paycheck Protection Program Information Sheet for Lenders
- Paycheck Protection Program Information Sheet for Borrowers
- Paycheck Protection Program Sample Application Form
- Find eligible lenders near you
COUNSELING AND TRAINING
$275 Million for SBA’s Resource Partners and the Minority Business Development Agency to provide vital mentorship, guidance, and expertise to small business owners and entrepreneurs impacted by COVID-19.
|HOW WILL GRANTS BE USED?||SBA's Resource Partners – Small Business Development Centers (SBDCs) and Women's Business Centers (WBCs) –and the Minority Business Development Centers (MBDCs) will be able to expand their reach and better support small business owners with COVID-19 concerns.|
|WHAT SPECIFIC TOPICS WILL BE COVERED?||• Provides Assistance with Loan Application Process
• Access risks and prevention of COVID-19
• Handle supply chain disruptions
• Protect against cyberthreats
• Handle less travel and foot traffic
• Any other COVID-19 concerns
|WHERE CAN I FIND A RESOURCE PARTNER NEAR ME?||Small Business Development Centers
|Women's Business Centers
|Minority Business Development Centers