Small business are especially hard hit during the COVID-19 due to the many shelter-in-place orders across the US, as well as the shutdown of “non-essential” businesses. The Small Business Administration (SBA) has a number of resources, some that were already in place prior to COVID-19, and some that have been enacted in response to COVID-19 (most notably through the CARES Act).
The newly enacted relief programs include:
- Paycheck Protection Program (PPP): This loan program is a temporary expansion of the traditional SBA 7(a) loan program with a few key additional provisions, most notably that the SBA will forgive loans of businesses that keep all employees on payroll for eight weeks, and the loan funds are used to cover payroll, rent, mortgage interest, or utilities. Get more info about the PPP in our EIDL and PPP presentation.
- Economic Injury Disaster Loan (EIDL) Emergency Advance: In addition to the Economic Injury Disaster Loans offered by the SBA, certain businesses are eligible for an advance of their EIDL loan of up to $10,000. Get more info about the EIDL program and emergency advances in our EIDL and PPP presentation
- SBA Express Bridge Loans: For small businesses that already have a business relationship with an SBA Express Lender, this pilot program allows businesses to access up to $25,000 quickly, while they await the outcome of an EIDL loan application or are still awaiting disbursement.
- SBA Debt Relief: The three primary forms of debt relief offered by the SBA are as follows:
- For current 7(a), 504, and microloans: The SBA will automatically pay principal, interest, and fees on these loans for a period of six months.
- For new 7(a), 504, and microloans: The SBA will automatically pay principal, interest, and fees on these loans if issued prior to September 27, 2020.
- For current SBA Serviced Disaster (Home and Business) Loans: If your disaster loan was in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through December 31, 2020, although it will not cancel established preauthorized debits (PAD) or recurring payments. If borrowers wish to utilize these deferrals, they must cancel any PAD or recurring payments.
Read about all of the SBA’s relief options, as well as updates regarding appropriations updates, on their website, here.