SBA Disaster Loan Updates and the CARES Act
Dear Small Business Owners,

I wanted to update you on some of the changes to the SBA Economic Injury Disaster Loan and new programs created by the Coronavirus Aid, Relief and Economic Security Act (CARES Act)   recently passed by Congress and signed by the President. This legislation has brought $2.2 trillion to the economy to support citizens and small businesses impacted by the COVID-19 pandemic. We at the Ohio Small Business Development Center are here to assist small business owners to take advantage of the programs best suited to make a positive impact on their businesses.

Here are three major programs created in the legislation designed for small businesses:

Economic Injury Disaster Loans:  The Economic Injury Disaster Loan is a low-interest, fixed-rate loan, with extended terms, designed to offset a lack of working capital for small businesses. This would be used to pay for operational costs such as rent, utilities, and payroll based on lost revenue directly related to the COVID-19 outbreak. Unsecured loans are available up to $25,000. Loans over that amount will require collateral with real estate preferred. The loans feature a reduced interest rate of 3.75% on loans to for-profit businesses and 2.75% to private, non-profit businesses. Payments are deferred for 11 months which means there are no payments due for a year. More information and the application portal is at .

Emergency Economic Injury Grants: These grants provide an emergency advance of up to $10,000 to small businesses applying for the Economic Injury Disaster Loans. You access these grants when you apply for the Economic Injury Disaster Loan and request the advance on the application. $10,000 will be made available to you within three (3) days of your completed application.  This advance is a grant and does not need to be repaid, however it will be deducted from your approved loan amount. These funds can be used to keep employees on payroll, pay for sick leave, pay business obligations or other impacted operational issues created by the COVID-19 outbreak.

Paycheck Protection Program (PPP) Loans:  This program provides cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll a portion of the loan will be forgiven, which would help workers remain employed. Note, this program also allows for employees released due to the Covid-19 restrictions to be rehired thus qualifying the business for this loan product. Loan amounts will be determined by SBA guidelines for the loan and will base calculations on qualifying expenses for the period from February 15, 2020 – June 30, 2020. Note, you will go to your bank to apply for these loans rather than applying directly to the SBA.

Specific features of these loans include:
  • Forgiveness of a portion of the loan equal to 8 weeks of payroll
  • Interest rate on the portion of the loan not forgiven is .5% with a maximum term of 2 years
  • No SBA fees, zero prepayment fees
  • At least six months of payment deferral.
  • Loans can be used for payroll and payroll related costs; continuation of health care benefits; payments of interest on mortgages; rent; Utilities; and interest on debt obligations incurred prior to the period

There are a lot of moving parts relating to support available for small businesses and in some cases misinformation. Be cautious of entities offering to assist you in getting access to any of these programs for a fee. There are many resources available to assist you through the SBDC, the SBA, Economic Development entities, Chambers of Commerce or you local government.

We at the SBDC are specifically trained in these products and are fully staffed and ready to assist you, at “no cost" during these challenging times. Please feel free to reach out the Ohio SBDC at Columbus State by calling 614-287-5294 or email .

Thank you for all you do to pursue your vision of small business ownership. We can all come through this stronger and wiser by working together and supporting each other.

Stay safe!

Michael Bowers
Ohio SBDC at Columbus State
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The Ohio Small Business Development Center (SBDC) Program is funded in part through a cooperative agreement with the U.S. Small Business Administration. The SBDC program is also funded in part by the Ohio Development Services Agency. All services are extended to the public on a non-discriminatory basis. Language assistance services are available for limited English proficient individuals. Reasonable accommodation for persons with disabilities will be made if requested at least two weeks in advance. Contact SBDC at (614) 287-5294 or at our website: