SBA Has Grants If Your Business Was Negatively Impacted Due to the Coronavirus.
Emergency business funding is now available if your business has been negatively impacted due to the Coronavirus pandemic. Congress recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to assist small businesses around the country. They were able to create two programs specifically for companies with less than 500 employees. Unlike the Paycheck Protection Program (PPP) which has the ability to forgive the loan,
Who will qualify for the EIDL program from the SBA?
Depending on which of the programs you apply for, there are a different set of guidelines for each one. There are two known loan programs that are associated with the COVID-19, the Paycheck Protection Program dubbed “PPP”, and the Economic Injury Disaster Loan Program dubbed “EIDL”. Both have its benefits and both seem very aggressive when reviewing its guidelines. Please keep in mind that there is very little information available for these programs, when our management team reached out to the SBA help desk, they too were not able to answer all of the questions we had for them. So, we will only be able to list the information we’ve learned thus far.
SBA (7b) Economic Injury Disaster Loan Program (EIDL)
Under the SBA’s Economic Injury Disaster Loan Program (EIDL), they have created a specific loan and loan advance for the COVID-19 pandemic. After speaking with several SBS lenders/banks they feel this might be the fastest way to infuse capital into your business. This program offers an emergency grant up to $10,000 in as little as 3 days of applying. This advance does not need to be repaid. The grants will be available till December 31, 2020. The proceeds for the grant should be used to keep employees on your payroll, to pay for sick leave, meet increased costs associated with supply chain disruptions, rent or mortgage payments, or pay other business obligations including debts. This is available for small businesses with less than 500 employees, sole proprietorships, with or without employees, independent contractors, cooperatives and employee owned businesses, tribal small businesses. You must have been operating since January 31, 2020.
The EIDL also has a loan component that has a maximum loan amount of $2 million with the interest rate being no greater than 3.75% for profit companies and 2.75% for NPO’s. The term is up to 30 years and just like the PPP there will not be a prepayment penalty. Even if you are denied for the 7(b) loan, the emergency advance grant does not need to be repaid. To apply for this program, click here.
There is also the SBA (7a) Paycheck Protection Program (PPP), which offers up to $10 million. This program gives the business owner the ability to retain or re-hire employees. This loan has the ability to be forgiven if your company can comply with their requirements. To learn more about the Paycheck Protection Program, click here (link my new page for this post).
If your company is not in distress, but you are seeking assistance with obtaining equipment for your business, you can still give one of our advisors a call and they can help prequalify you for any of our programs. Please contact us at 888-565-6692
If you are seeking additional information on either program, it is best to visit the SBA’s website.
SBA is Offering Free Grants for Business Owners! | First Capital Business Finance