The CARES Act signed by President Donald J Trump on March 27, 2020, provides approximately $2.2 trillion of fiscal stimulus, that provided $350 billion to aid U.S Business. The bill was expanded on April 23, 2020 to provide an additional $484 billion of coronavirus-relief funding, including an additional $320 billion for the government-backed SBA Paycheck Protection Program (“PPP”).
Businesses across most industries have been affected in one way or another. From being unable to keep staff employed to being unable to cover monthly expenses such as payroll, rent and utilities.
Armed with an additional $350 billion in its war chest, the SBA has rolled out three loan programs: the SBA Paycheck Protection Program, SBA Disaster Loans Program, and the SBA EIDL Cash Advance Program. These programs will provide loan guarantees of up to 100% of the loan amount to the bank and non-bank lenders for them to finance these COVID-19 Disaster Relief Loans to U.S for-profit Businesses affected by the COVID-19 pandemic.
Please read below on how either program Paycheck Protection Program, SBA Disaster Loans, Community Advantage or EIDL Cash
The advance could help your business today!
The SBA PPP is a program that will provide up to a 100% loan guarantee to the bank and non-bank lenders that finance U.S Business affected by the COVID-19 shutdown.
SBA PPP loans will help small businesses maintain payrolls and continue necessary payroll-related payments like rent and utilities. The full allowable uses of the loan are:
For-Profit U.S based Businesses, including sole proprietors and independent contractors. Companies that have a min of one year in a business that was open as of February 1, 2020.
The SBA PPP Loan program will follow the same guidelines of the SBA 7(a) program to provide up to a 100% loan guarantee to a bank or non-bank lender that funds a business loan to a U.S Business.
The Cares Act allows for pared-down SBA requirements for PPP loans. For example, typically, the SBA would guarantee up to 85% of the loan to the bank or SBA Preferred Lender for most other SBA loan products. This is why SBA PPP loans are eligible to be forgiven, up to 100% of the loan principal. Under the SBA PPP Loan program, the allowed funded amounts would be for the lesser of either 2.5 average monthly payroll costs over the last trailing 12 mos of the application or $10mm. The goal of the SBA with the PPP Loan program is to assist anywhere from 8-10 weeks of a business' payroll costs.
If a business manages to keep their staff employed, the loan may be entirely forgiven, converting it to a grant. If businesses are unable to keep their staff employed, businesses have to service the loan but will have payments for this deferred for the first year. Once a business provides the necessary paperwork required, the SBA expects to offer a swift response to companies in need. Further inquiries can be directed to the SBA’s PPP Loan Program FAQ page.
Loan Proceeds may be used to pay certain business expenses, including payroll, employee benefits, rent, utilities, and interest on mortgage and debt obligations.
Fast turnaround time compared with most SBA loan products.
Loan amounts may be forgiven if they're used to cover payroll costs, most mortgage interest, rent, and utility costs during eight weeks after the loan is granted.
The program will cover up to $100k per year in salary per employee.
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.
Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
This loan has a maturity of 2 years and an interest rate of 1%.
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
This new program is due in part to the CARES Act stimulus package. The SBA created to cover the payroll costs, lease and interest on mortgages or rent payments, and utilities for businesses dealing with the impact of the COVID-19 / Coronavirus epidemic. The SBA PPP Loan will cover up to 10 weeks of a business's payroll costs and other approved expenses. This will be done via a term loan for up to 10 years with a 4% interest rate. Payments for this program may be deferred for the first year. If a business keeps its employees for four months, then the entirety of the loan may be forgiven, essentially converting the loan into a grant to help stabilize U.S. businesses. Further details can be found at the SBA’s PPP Loan FAQ page.
4% if not forgiven
0% if forgiven
Up to 10 years
Up to $10,000,000
The SBA Disaster Relief Loans program provides loan guarantees of up to 100% of the loan amount to the bank and non-bank lenders to offer financing to U.S Businesses affected by a disaster. The funds can be utilized to pay for sick leave of employees who are unable to work due to a direct effect of COVID-19, other accidents, the company's materials, fixed debts, payroll, accounts payable, and other bills that can't be paid because of the disaster's impact.
For a for-profit and non-profit U.S Business affected by a pandemic, natural disaster, or other hardship, you or your business may be able to qualify for disaster relief. Speculative companies (i.e., investment real estate companies are not eligible). Borrowers also cannot be involved in religious indoctrination, agriculture, gambling, etc.
The SBA provides a loan guarantee of up to 100% of the loan amount to a bank or non-bank lender that funds a U.S. Business affected by a disaster.
Businesses need to submit a claim to their insurance company and get started with the process of determining what insurance will payout.
The SBA will only pay for damage that is not covered by insurance, but you can begin the loan process before you know the amount repaid by insurance. You may be able to apply for the SBA loan and agree to use insurance proceeds to repay or reduce it.
The Loan amounts can be for up to $2,000,000.00. The terms can be up to 30 years, the longest of the Small Business Administration. SBA Disaster Loans also have some of the lowest interest rates on the marketplace ranging from 3.75% and 2.75% for non-profit companies. Loan payments are generally deferred for the 1st year after the contract is signed.
SBA Disaster Relief Loans come in two forms:
Economic recovery loans usually take the form of working capital loans for operating expenses to help small businesses survive during the recovery process.
It provides a lifeline to businesses affected by things beyond their control in dire need of relief.
First, you need to determine if you are in a declared disaster area. The federal government, the SBA, and the Secretary of Agriculture can maintain a city as a designated disaster area. Check the list of current designated disaster areas to see if your area is included.
Additional documents needed for your company and the applicants include:
If a business is affected by a pandemic, damaged, or destroyed due to a hurricane, flooding, fire, or drought, you could qualify for an SBA Disaster Loan. To qualify, the owners will need to prove that the business is in a declared disaster area. Also, the SBA will want to know how the business has been negatively affected by this disaster. For example, if you have damaged property or need to repair or replace equipment.
30 Years Max
Up to $2,000,000
Due to the COVID-19 pandemic, the Economic Injury Disaster Loan is providing an emergency relief of up to $10,000. This grant is not a loan and can take as little as 72 hours to hit your account. The benefit of these grants is that it does not have to be repaid as long as funds are utilized for:
For-profit valid use business. Must have been in business before February 1, 2020, Business was affected by COVID-19. The company must have less than 500 employees. All businesses must apply before December 31, 2020.
Additional documents needed for your company and the applicants include:
In addition to the financial loan programs provided by Congress with the support of the Small Business Administration due to the Coronavirus/ COVID-19 outbreak. The SBA has 12 loan programs that provide loan guarantees to lenders to motivate lending to the small and mid-sized business community. Since 1953 the U.S Small Business Administration has been a real financial backer to U.S Small Businesses. Hyperlink to our SBA Financing home page
We have a very seasoned team heading our SBA Loan Brokerage division. Working hand in hand with some of the nation's top banks and SBA Preferred Lenders to ensure our clients can take full advantage of the additional $350 million dollar; the SBA has to offer under the recently added the signed CARES Act.
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Our nation's small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
To learn more about the relief options available for your business, click here.
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The Centers for Disease Control and Prevention (CDC) offers the most up-to-date information on COVID-19. This interim guidance is based on what is currently known about the coronavirus disease 2019 (COVID-19). For updates from CDC, please see the following:
The following interim guidance may help prevent workplace exposures to acute respiratory illnesses, including COVID-19, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19.
To prevent stigma and discrimination in the workplace, use the guidance described below and on the CDC’s Guidance for Businesses and Employers web page.
Below are recommended strategies for employers to use now. In-depth guidance is available on the CDC’s Guidance for Businesses and Employers web page:
Common Issues Small Businesses May Encounter:
SBA works with a number of local partners to counsel, mentor, and train small businesses. The SBA has 68 District Offices, as well as support provided by its Resource Partners, such as SCORE offices, Women’s Business Centers, Small Business Development Centers and Veterans Business Outreach Centers. When faced with a business need, use the SBA’s Local Assistance Directory to locate the office nearest you.