The CARES Act, the $2.1 trillion stimulus package approved by Congress last week, means many small businesses can now get disaster relief loans, payroll help, or assistance with existing loans from the U.S. Small Business Administration (SBA).
"Small businesses, private non-profit organizations of any size, small agricultural cooperatives and small aquaculture enterprises that have been financially impacted as a direct result of the Coronavirus (COVID-19) since Jan. 31, 2020, may qualify for Economic Injury Disaster Loans of up to $2 million to help meet financial obligations and operating expenses which could have been met had the disaster not occurred," said SBA Administrator Jovita Carranza.
The deadline to apply for Economic Injury Disaster Loans (EIDLs) is Dec. 21, 2020.
"These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can't be paid because of the disaster's impact. Disaster loans can provide vital economic assistance to small businesses to help overcome the temporary loss of revenue they are experiencing," Carranza said in the announcement.
The EIDLs carry an interest rate of 3.75% for small businesses and 2.75% for private nonprofits. The loans can be for up to 30 years. Applications and more information are available online. The SBA also offers a customer service line at 800-659-2955 and email access at email@example.com.
The rules are still being worked out in many cases, but it's probably a good idea to go ahead and get in line online or at your lender if you have an existing SBA loan or think you might be eligible for a new one under the pandemic relief just enacted.
A variety of offerings
The CARES Act also adds a new product called the Paycheck Protection Program. Those loans, for up to $10 million for 10 years at up to 4% interest, offer a six-month to one-year deferral to start with and can be used for salaries, sick leave, utilities, mortgage and rent, and other expenses.
You can find more info on the Paycheck Protection Program here and the SBA application here. Rules include not employing more than 500 employees, and a wide variety of ownership structures are eligible, including different kinds of cooperatives, nonprofits, and employee ownership.
As for whether you even qualify as a small business by the SBA definition, check here. Whether you're in an officially declared disaster area also makes a difference. You can find more info on that here.
There are other programs in place now, too, including bridge loans and entrepreneurial center assistance. You can find a complete rundown of SBA responses to the pandemic here.
Also, check your local and state government sites for information about help from those sources.
There's a lot of interest and investment in keeping the economy going as much as possible now and being poised for the rebound to come. Now's the time to get informed and take action.
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