As stated in our previous e-blast on Saturday, the U.S. Small Business Administration (SBA) has been authorized to offer two new loan facilities to assist business owners:
7(a) Paycheck Protection Program (PPP)
7(b)Economic Injury Disaster Loan (EIDL)
These two separate SBA Loan Programs carry the same objective to support businesses during the COVID-19 disruptions, but have different qualification criteria, loan terms, dollar limits, and related conditions.
The EIDL program is currently accepting applications and you can register directly with the SBA at: https://covid19relief.sba.gov/#/. Applying for the EIDL, also allows you to be immediately eligible for the $10,000 emergency economic injury grant advance - that is not required to be repaid.
PPP loans will be administered by an SBA preferred lender. The initial application has been posted by US Treasury and is available at https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf. It is expected that the respective SBA preferred lenders will have their own additional requirements to process these loan applications, in some cases those requirements are yet to be determined. Starting April 3, 2020, small businesses and sole proprietorships can apply. Independent contractors and self-employed individuals can start applying on April 10, 2020.
Although the funding available under the PPP is significant, there is a funding cap established by Congress of $349 Billion. We anticipate these loans will be in high demand and funding will not be available for long. Therefore, we encourage anyone who is interested in applying to reach out to your bankers NOW to determine if they are preferred SBA lenders, what other forms or documents you will need to provide, and be prepared with your information to apply the day applications are open for acceptance.
If we can assist you in explaining the programs' provisions, analyze the potential benefits or assist you with gathering the needed information, please call any Sponsel CPA Group Team member or our colleagues listed below.