Created in 1953, the U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs start, grow, expand, or recover. The SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.
In response to the Coronavirus (Covid-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for the following loan and grant programs.
PPP
The Paycheck Protection Program (PPP) is an SBA loan that helps businesses keep their workforce employed during the coronavirus (Covid-19) crisis.
PPP is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. (Due to 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 two years and an interest rate of 1%.
Small businesses can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
EIDL
The Economic Injury Disaster Loan (EIDL) provides up to $10,000 for qualified small businesses. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue.
Funds will be made available following a successful application. This loan advance will not have to be repaid.
The EIDL provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the Covid-19 pandemic.
This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by Covid-19.
Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.
The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.
Bridge loans
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.
If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
This loan can be repaid in full or in part by proceeds from the EIDL loan.
