The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for an emergency advance of $10,000 to small businesses and private non-profit organizations affected by COVID-19. In order to receive the advance, you must apply for the Economic Injury Disaster Loan (EIDL) and request the advance at the end of the application process. The loan advance funds will not have to be repaid even if the EIDL application is denied. The EIDLs are up to $2 Million with terms up to 30 years and interest rates of 3.75% for small businesses and 2.75% for non-profits. EIDLs requesting funds up to $200,000 can be approved without a personal guarantee and do not require real estate as collateral.
As mentioned in our previous email and blog post, on Friday President Trump signed a $2 trillion stimulus package. In a move designed to keep small businesses afloat, the CARES Act allocates $349 billion to loans the Paycheck Protection Program loans under the Small Business Administration. We provided details on the Program in a previous post.
Lenders are working out the final details with the Small Business Administration (SBA), but you can take steps now to prepare for the application process to avoid delays. Applications may be ready to be processed as early as next week. We suggest that you contact your bank and ask if they are qualified SBA 7(a) lenders and participating in the Payback Protection Program. Inform them of your interest in applying and ask how you can prepare. Please feel free to reach out to our team with questions.
In response to the Coronavirus (COVID-19) outbreak, city, state and national governments are offering various types of relief for small businesses. Below is a summary related to relief offered by the Small Business Administration (SBA) related to the epidemic, we suggest you apply as soon as possible as processing delays are expected. The SBA has indicated that online application will result in the fastest method to receive a decision.