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Economic relief for $mall businesses
he Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27, 2020. This over $2 trillion economic package contains $376 billion in relief for American workers and small businesses. The U.S. Small Business Association offers multiple funding options for those seeking relief, including: — Paycheck Protection Program: This loan is designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely
high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. — Economic Injury Disaster Loan Emergency Advance: This $10,000 Economic Injury Disaster Loan advance is designed to provide economic relief to businesses currently experiencing a temporary loss of revenue due to COVID-19. At this time, only agricultural business applications will be accepted due to limitations in funding availability and the unprecedented submission of applications already received. Agricultural businesses include those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)). — SBA Express Bridge Loan: This program allows small business owners who
BUSINESS NEWS
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SUMMER 2020
currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. — SBA Debt Relief: As part of the SBA’s coronavirus debt relief efforts, the SBA will pay 6 months of principal, interest and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to Sept. 27, 2020. This relief is not available for Paycheck Protection Program loans or Economic Injury Disaster loans. Borrowers do not need to apply for this assistance, it will be automatically provided if applicable. For more information about these programs, visit https://www.sba.gov/funding-programs/ loans/coronavirus-relief-options
