COVID-19 Cash Assistance for Small Business
What programs are currently providing forgivable emergency cash advances and low interest loans?
At this time, there are two programs: the SBA Economic Injury Disaster Loans (EIDLs) and the CARES Act/Payroll Protection Program (PPP). These two programs are funded through the federal economic stimulus bill signed into effective by the President on March 20, 2020.
How can these two programs help small businesses?
The SBA EIDLs and CARES Act/PPP both provide low interest loans for small businesses administered through the Small Business Administration (SBA) and local banks approved to process SBA loans.
What is the difference between the two programs?
The SBA EIDLs program offers a 30 year, 3.75% interest, with no payment for 12 months.
The CARES Act/PPP program offers a 10 year, 4% interest, with no payment for 6-12 months.
Businesses can receive forgivable emergency cash advances up to $10,000 from each program provided the funds are used to pay payroll costs, rents for leases in force before February 15, 2020, electricity, gas, water, transportation, or internet access expenses for services which began before February 15, 2020, and group health premiums and other healthcare costs. In order for the amounts to be forgiven, businesses must maintain the same average number of employees for the first eight-week period beginning on the origination date of the loan as they did from February 15, 2019 - June 30, 2019 or from January 1, 2020 until February 15, 2020. If a business does not meet this requirement, the amount forgiven is reduced.
Who is eligible?
Small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations (in operation before February 15, 2020) AND self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply (in operation before February 15, 2020).
When can I apply?
Businesses can apply now for the SBA EIDLs Program! There are no loan fees, guarantee fees or prepayment fees.
Go to: www.SBA.gov/disaster and make sure to apply for the Economic Injury for the coronavirus, not the physical damage due to disaster (that is a different declaration number).