The Small Business Association (SBA) has deployed four major funding programs as part of the CARES Act. These programs are available to businesses in providing support and various resources in overcoming the hardships small businesses are facing during the COVID-19 crisis. The four major programs focusing on relief throughout the pandemic is the Paycheck Protection Program (PPP), EIDL Loan Advance, SBA Express Bridge Loan and SBA Debt Relief program. Each program focuses on different funding needs, has different requirements and supports different relief efforts. All the programs are outlined below as additional support and a resource guide to businesses and business owners to help select which funding the right fit for their needs. Businesses are eligible to apply to all of the SBA relief programs.
Paycheck Protection Program
The Paycheck Protection Program (PPP) is a forgiveness loan to help employers keep their employees paid and benefits covered while also being able to keep up with rent/mortgage payments and utilities. This program is accepting applications through June 30th, 2020 and is available to businesses with under 500 employees, with limited exceptions. Here are some highlights on the program:
- Interest Rate: 1%
- Loan Size: 5 times the average one month of payroll and benefits costs capped at an annualized rate $100,000 per employee
- Used for: Payroll, employee benefits, rent, mortgage interest and utilities
- Loan Forgiveness: The amount spent on payroll (within the same cap listed above), rent, mortgage interest, and utilities during the 8 weeks after funding will be forgiven
For more information on this program please visit the SBA PPP page.
*Please note this program is currently unavailable until additional funding is acquired. An update will be given with information when new funds become available for this program.
EIDL Loan Advance
For businesses experiencing a temporary loss of revenue due to the COVID-19 pandemic, the EIDL Loan Advance program provides vital funding support to small businesses nationwide up to the amount of $10,000. These funds will be available to businesses within just a few days upon application approval and businesses/companies with less than 500 employees are eligible to apply for the EIDL Loan Advance. Here are some highlights on the program:
- Interest Rate: 0%
- Loan Size: Up to $10,000
- Used for: Loss of revenue during COVID-19 pandemic
- Loan Forgiveness: Yes, this loan advance will not be repaid
- Note if received the $10,000 will be netted off any PPP loan proceeds the business may be eligible for
For more information on this program please visit the SBA EIDL Loan Advance page.
SBA Express Bridge Loan
Many businesses have a previously existing relationship with the SBA. For businesses with preexisting relationships, they are eligible for a $25,000 express bridge loan with an expedited turnaround time compared to some of the other SBA COVID-19 relief programs. These loans are vital in providing economic support to small businesses experiencing a temporary loss of revenue. As this loan sounds similar to the EIDL Loan Advance program, they are very different as you must pay back this bridge loan in full and the funding amounts are different. Here are some of the highlights on the program:
- Interest Rate: 5%-6.5%
- Loan Size: $25,000
- Used for: Loss of revenue
- Loan Forgiveness: No
For more information on this program please visit the SBA Express Bridge Loan page.
SBA Debt Relief
The SBA Debt Relief program is a multitude of programs implemented through the CARE Act by the SBA. These debt relief efforts will cover principal payments, interest and fees of current 7(a), 504 and microloans for a period of six months as well as new 7(a), 504 and microloans before September 27th, 2020. For current SBA Serviced Disaster Loans that are in “regular service” as of March 1, 2020, the SBA will also provide automatic deferments through the end of 2020. The deferments will not cancel any established preauthorized debit or recurring payments on your loan and interest will continue to accrue on the loan. After the deferment period, business, as usual, will occur and payment installments will be in place on your existing loan.
For more information on this program please visit the SBA Debt Relief page.
- Small Business Relief