News To Use
There are currently two major federal loan programs for small businesses seeking aid during the COVID-19 crisis offered by the U.S. Small Business Administration (SBA), expanded by the US CARES Act. One is the newly-created Paycheck Protection Program, or PPP. The other is the Economic Injury Disaster Loan Program or EIDL (see down further).
At Midnight Tonight, the Application Period Opens for PPP!
Paycheck Protection Loan Disaster Relief also known as SBA 7A Loans--made from your area bank and guaranteed by the US Small Business Administration.
on March 31 that all loans under this particular program will have the following identical features:
- Interest rate of 0.5 percent
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
How to apply
from the SBA current as of April 1, 2020: “You 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. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.”
Who Can Apply
--Small Businesses, including sole proprietors and independent contractors, under 500 employees
--Hospital & Dining Encouraged to Apply
If you have other outstanding loans, ask your primary banker to make sure this application will not be a violation of existing loan covenants.
You can also consider the
EIDL loan program
(Economic Injury Disaster Loans).
These are applied for primarily through the SBA website. For these you must have a favorable credit history and note an ability to repay. It can be used for paying fixed debts, payroll, and other bills. Loans over $25K require collateral. Emergency advances at $10K are available for immediate use. This is the recommended path for those who have no employees, because it also has a longer payback period.
•There is no cost to apply
•There is no obligation to take the loan, if offered.