SBA COVID-19 Relief Loans
The White House announced that $300 billion will be added to the SBA lending authority to assist businesses impacted by the coronavirus.
Important Information for Business Owners
The Congressional Small Business Task Force announced a $300 billion Emergency COVID-19 Relief Package as part of Division A of the Coronavirus Aid, Relief, and Economic Securities Act, and the Keeping Workers Paid and Employed Act. This comprehensive relief package includes:
- $300 billion in SBA 7a loans
- Businesses can apply for either the SBA 7a relief loan or the Economic Injury Disaster Loan (EIDL), but not both
- Loans provide up to $10 million, and are structured around average monthly payroll costs, mortgage or rent payments, plus other debt obligations and liabilities incurred for a one-year period prior to the loan application. For seasonal businesses, loans are calculated from payroll expenses from March 1, 2019 through June 30, 2019.
- Funds are only to support payroll, including health benefits, medical leave, employee salaries, mortgage, rent, utilities, and other debt payments. SBA 7a relief loans cannot be used for business acquisitions, commercial real estate, or other typical SBA 7a uses.
- SBA relief loans are 100% government-guaranteed until December 31, 2020.
- Funding available for eligible SBA borrowers and not-for-profit organizations
- Underwriting will be performed by select lenders to expedite processing and availability of funds.
- A process will be put in place to offer loan forgiveness to borrowers equal to costs related to payroll and debt obligations from the period starting March 1, 2020 through June 30, 2020. The amount will be scaled by the number of employees laid off, and will exclude employees with salaries in excess of $100,000.
- Participating lenders will be required to verify all payroll expenses.