On Friday, the Coronavirus Aid, Relief, and Economic Security Act became law, and that is great news to small business owners struggling with the effects of COVID-19 stay-at-home orders.
Here’s how it might help you or a small business owner you love:
SBA Economic Disaster Loans and Grant
- Small business owners can apply for an Economic Injury Disaster Loan of up to $2 million with interest rates of 3.75%.
- And here’s the best part—when you apply for the loan, you can also apply for a grant of $10,000. The SBA website calls this an advance on the loan, but it does not need to be repaid if used for paid leave, payroll, and a wide variety of business expenses.
- Even if you are denied for the loan, you can still get the $10,000 grant.
- The first month’s loan payment is deferred for one year.
- The SBA is promising a simple application which, for loans under $200,000 does not require a personal guarantee.
You can apply directly here: https://www.sba.gov/disaster/apply-for-disaster-loan/index.html
The application that includes the $10,000 grant is not live yet, but the SBA is promising to have it ready in days.
SBA Paycheck Protection Program
- Small business owners can apply for loans of up to $10 million through their local lenders, and the loans are backed by the SBA.
- The loans are no fee and do not require a personal guarantee.
- Interest is capped at 4%.
- The loan repayment provisions are generous, and payments the business makes for payroll, rent, utilities, and health insurance may be forgiven.
- Small businesses can apply for both types of loans.
Senator Brian Schatz’s office has a good summary of support available to small business under the CARES Act here: https://www.schatz.senate.gov/coronavirus/small-businesses
