Small Business Administration COVID-19 Relief Programs
Please note that this document is based on our review of SBA program guidelines, the documents released to date and our extensive conversations with SBA lenders and CDCs.
The below should not be construed as a definitive determination, modification of any existing documents or requirements, or representation of a final program. Furthermore, this overview is not and should not be construed as legal advice. This is a very fluid and dynamic topic and we expect this document will be modified and updated as additional information becomes available.
PAYCHECK PROTECTION PROGRAM (PPP)
Through June 30, 2020, eligible small businesses (generally those with 500 or fewer employees) and private nonprofits may apply for a loan up to $10 million determined by eight weeks of prior average payroll plus an additional 25% of that amount. The interest rate for the program is 1.0% for a term of two years, with payments deferred for six months. There are no fees, and no collateral or personal guarantees are required.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent and utilities. 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.
• Application Form (Form 2483)
HOW TO APPLY
We encourage you to apply as quickly as you can because there is a funding cap of $349 billion. Starting April 3, 2020, small businesses and sole proprietorships may submit applications to a participating SBA lender, typically your bank. (Independent contractors and self-employed individuals may apply starting April 10, 2020.) All federally insured depository institutions, federally insured credit unions and Farm Credit System institutions are eligible to participate in this program.
ECONOMIC INJURY DISASTER LOANS (EIDL) AND LOAN ADVANCE
This program provides small businesses with working capital loans of up to $2 million at an interest rate of 3.75%. Businesses may also apply for a loan advance of up to $10,000. Funds will be made available within three days of a successful application and, regardless of final loan approval, the loan advance will not have to be repaid. The loan may be used for paid sick leave to employees, maintaining payroll, meeting increased production costs due to supply chain disruptions, or paying business obligations, including debts, rent and mortgage payments.
Businesses with an EIDL may also apply for a PPP loan or may refinance their EIDL into a PPP.
Business Loan Application (Form 5)
Economic Injury Disaster Loan Supporting Information (Form P-019)
HOW TO APPLY
ELECTRONIC DROP BOX (FASTEST)
Fill out the application and supporting information forms linked above and submit them using the online drop box.
ONLINE APPLICATION
Visit https://covid19relief.sba.gov to complete the online application.
PRINTED APPLICATION
Complete and print the application and supporting information forms linked above and mail them to the Fort Worth address listed on the application.
ENHANCED DEBT RELIEF
Under this program, the SBA will pay the principal and interest of current and new 7(a) loans and 504 debenture loans for up to six months through September 27, 2020. First mortgages on 504 loans are not included. Existing borrowers should contact their lender directly with questions. To discuss applying for a new 504 or 7(a) loan, contact your VOIT relationship manager.
NEED EXTRA HELP?
The SBA partners with America’s Small Business Development Centers, who will help businesses process and submit applications at no cost. The U.S. Chamber of Commerce is also partnered with SCORE to provide mentoring and assistance.
ADDITIONAL INFORMATION:
SMALL BUSINESS ADMINISTRATION
Coronavirus (COVID-19): Small Business Guidance & Loan Resources
U.S. CHAMBER OF COMMERCE
Coronavirus Small Business Guide & Loan Resources
DEPARTMENT OF THE TREASURY
Assistance for Small Businesses
https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
CARES ACT: HELPING SMALL BUSINESS
Debt Relief: For six months, SBA is required to pay all principal, interest and fees on all existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs for six months. Click Here
Please don’t hesitate to call me with any questions at (858)458-3361.