Small Business COVID-19 Funding Resources
In response to the Coronavirus (COVID-19) pandemic, the U.S. Small Business Administration (SBA) has created an online page listing loan resources available to small businesses affected by the pandemic. Those resources include the following.
The Economic Injury Disaster Loan (EIDL) program is an existing program that provides low-interest, long-term working capital to small businesses affected by COVID-19. EIDL is designed to replace working capital that businesses have lost due to suspension or disruption of business operations due to COVID-19. The SBA has streamlined its application process and is using greater latitude to approve these loans. Also new is the provision for loan advances up to $10,000 that may not have to be repaid. The advances will be based on the number of employees on the payroll as of January 31, 2020 with $1,000 allotted per employee up to the $10,000 maximum. Applications are now available online.
If you applied for EIDL prior to March 30, it is recommended that you re-apply using the new application portal unless you have been approved or are already working with a loan officer. If you applied for an EIDL after March 30 but did not apply for the $10,000 EIDL Advance, it is best to submit another application rather than edit the existing application. If you started to apply, but did not complete the application you will need to reapply using the new, streamlined application portal. If you applied for EIDL and were denied, it is recommended you re-apply as SBA expects to be able to approve many of the applications that were initially denied.
EIDL applications will be reviewed on a first-come-first-serve basis and approval notification is estimated at approximately three days. If you are asked to update your application, you will not lose your place in the application queue. If you want to know the status of your EIDL application, call 1.800.659.2955 or email firstname.lastname@example.org.
SBA Debt Relief is a new program created by the Coronavirus Aid, Relief and Economic Security (CARES) Act to help businesses with standard SBA 7(a) guaranteed loans. Under this program, the SBA will pay the principal and interest of new 7(a) loans issued prior to September 7, 2020 and pay the principal, interest and fees of current and non-delinquent 7(a) loans for six months, beginning with the first payment due after March 27, 2020. If you already made a payment since March 27, you have the option of either having the lender return your loan payment or apply the loan payment to reduce the loan balance after application of SBA’s payment.
The Paycheck Protection Program will provide small businesses with loans that will be fully forgiven when used to pay payroll, or interest due on mortgages, rent and utility services in place prior to February 15,2020. PPP is designed specifically to help businesses keep their workforce on the payroll or allow you to rehire them. Businesses can apply for both PPP and EIDL programs. More information concerning PPP can be found in this California Avocado Commission summary article.
SBA Express Bridge Loans will be updated to allow participating SBA Express lenders to extend up to $25,000 loans to their existing customers to provide economic support to businesses while they await EIDL or PPP application decisions.
Governor Newsom also has announced that California is launching a $50 million California Small Business Loan Guarantee Program, via IBank, for businesses that might not be eligible for SBA PPP loans. Small California businesses with 1 – 750 employees that have been negatively impacted by COVID-19 are eligible. Loans can be used for continuance of a business, including, but not limited to rent and payroll. The loans are guaranteed up to seven years (terms can be longer), with guarantees up to 85 – 95 percent of the loan. Loan interest rates will be negotiated between the lender and borrower.