Relief During COVID-19: SBA Programs that Can Help

The Small Business Association is offering a handful of financial relief programs for businesses in need during the COVID-19 pandemic. During the latest installment of SFA’s Ask the Experts: Business Continuity and Risk Mitigation Planning webinar series, Peter Fehnel of the SBA outlined some of the programs, including who is eligible, loan amounts, and how to apply.

The SBA’s financial relief programs include:

• Economic injury disaster loans 
  • Self-employed individuals, independent contractors, and businesses including Tribal-owned businesses, businesses with employee stock ownership (where employees own stock in the business), cooperatives and private/501(c)(3) nonprofits with 500 or fewer employees are eligible.
  • These loans are up to $2 million.
  • Funds may be used for payroll costs, salaries, and sick leave; rent or mortgage payments; material costs; or pre-existing debt.
• Economic injury disaster loan advance
  • Self-employed individuals, independent contractors, and businesses including Tribal-owned businesses, businesses with employee stock ownership (where employees own stock in the business), cooperatives and private/501(c)(3) nonprofits with 500 or fewer employees are eligible; though they must have been in operation as of January 31, 2020, are eligible.
  • This is an advance up to $10,000.
  • Funds may be used for working capital, including payroll costs, salaries, and sick leave; rent or mortgage payments; material costs; or pre-existing debt.
• Express bridge loan
  • Any business in operation before March 13, 2020, that has fewer than 500 employees or otherwise meets the SBA’s existing Size Standard (predicated or NAICS code and annual revenue) is eligible.
  • Loan amounts are up to $25,000.
  • Funds may be used for working capital, including payroll costs, salaries, and sick leave; rent or mortgage payments; material costs; or pre-existing debt.
• Paycheck protection program
  • Self-employed individuals, independent contractors, and businesses including Tribal-owned businesses, and private/501(c)(3) nonprofits with 500 or fewer employees are eligible.
  • Loan amounts of up to $10 million
  • Proceeds may be used for working capital, including payroll costs, salaries (does not include salaries above $100,000), benefits including sick leave, medical leave, and insurance premiums; rent or mortgage payments; or pre-existing debt with payments in place before February 15, 2020.
• Small business debt relief program
  • Current SBA borrowers are eligible for 7(a) loans not made under the paycheck protection program, 504 loans, and microloans.
  • The SBA will cover all loan payments on these SBA loans including; principal, interest, and fees, for six months.
• Existing SBA disaster loans
  • Existing SBA disaster loans will be automatically deferred through December 31, 2020.
  • Interest will continue to accrue on the loan.

Some programs, such as the paycheck protection program, are currently awaiting the U.S. government to vote on additional funding. While waiting, Fehnel recommends that businesses rethink their business strategy to make the most of their cash flow.

View the full recording now!

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