The rapid spread of the COVID-19 virus across the globe has had tragic impacts on people for a number of reasons. The health and well-being of people is at risk in these unprecedented times. To slow the spread of the pandemic, the U.S. has made sweeping changes such as shelter in place orders and temporary closures of businesses. It is no secret that the economy has suffered. Businesses have been forced to shut their doors completely. Others are struggling financially. The Small Business Administration has put several programs in place to help businesses get through this rough patch. Learn more to find out what resources are available to business owners impacted by the COVID-19 crisis.
SBA Emergency Aid Available to Businesses Impacted by COVID-19
The Small Business Administration (SBA) has put several emergency aid options in place to provide businesses with funding during the financially difficult time under the era of COVID-19. For instance, the SBA is currently overseeing the Paycheck Protection Program (PPP). The PPP is a loan program that makes loan forgiveness available for recipient businesses that retain employees. It is a temporary expansion of the traditional SBA 7(a) loan program and is intended to provide a direct incentive for small businesses to retain workers on their payroll. Should the employee retention requirement by met and funds utilized for qualifying expenses, the SBA will forgive the loan in full.
Additionally, the SBA has expanded who may access SBA Economic Injury Disaster Loans (EIDL) by granting working capital loans totaling upwards of $2 million to small businesses and nonprofit organizations impacted by the coronavirus. These are low interest loans now being made available to sole proprietors and businesses with less than 500 employees. Interest rates are set at 3.75% for small businesses and 2.75% for nonprofits. Recipients of an EIDL loan may defer making payments on the loan for up to 4 years.
There are also EIDL loan advances available that may provide up to $10,000 in economic relief to struggling businesses. The hope is that the loan advance will help those businesses experiencing a temporary loss of revenue. The EIDL loan advance does not need to be repaid and it is not contingent on whether the businesses are approved for a loan.
SBA Express Bridge Loans have also been made available to those businesses who already have an established relationship with the SBA. The loan programs allow a qualifying business access to a loan of up to $25,000 without much delay. The program offers a fast turnaround and is repayable in full or in part by EIDL loan proceeds.
Lastly, the SBA is offering debt relief for those with qualifying SBA loans that are already in place. The SBA will cover 6 months of the principal, interest, and associate fees for borrower who currently ow on 7(a), 504, and microloans in regular servicing status. The SBA will also provide this coverage for those who have new 7(a), 504, and Microloans that were disbursed before September 27, 2020.
Business Law Attorney
These are difficult times for everyone, businesses include. We will get through it together. For any help you may need to support your business during this time, the Kumar Law Firm is here to help however we can. Contact us today.