SBA is ready to help businesses affected by COVID-19
Small businesses have always been the engine of our economy. They create jobs, drive innovation, and lift up their communities. But the COVID-19 pandemic and resulting stay-at-home orders, while increasing our public safety, have presented immense challenges to small business owners. In response, the U.S. Small Business Administration is working hard to provide counseling and capital to all who need it.
Visit sba.gov/coronavirus for the most up-to-date information on loan programs and other support for small businesses impacted by COVID-19. Here are some highlights of how we can help.
Loans
• The SBA's Economic Injury Disaster Loan program provides low-interest loans worth up to $2 million to small business owners and private nonprofits.
These working capital loans, which are accessed directly from the SBA, can be used to meet needs including payroll, accounts payable, and fixed debt payments until the situation improves.
They have repayment options of up to 30 years, and the first payment is deferred for one year. Additionally, under the CARES Act, applicants can now receive an Economic Injury Disaster Loan Advance worth up to $10,000. This advance may be available even if your Economic Injury Disaster Loan application was declined or is still pending.
Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid. Visit sba.gov/disaster to apply via a new streamlined application.
• Under the Paycheck Protection Program, also included in the CARES Act, eligible recipients may qualify for a loan up to $10 million determined by eight weeks of prior average payroll plus an additional 25% of that amount. Loan payments will be deferred for six months. If all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities, the loan can be forgiven.
Business owners 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. Borrowers can apply now, and the program runs through June 30.
• Small business owners with existing SBA-guaranteed 7(a) loans are eligible for relief. Under the CARES Act, SBA will pay the principal and interest of current 7(a) loans for six months, beginning with the first payment due on or after March 27, 2020. The SBA will also pay the principal and interest of new 7(a) loans issued prior to Sept. 27, 2020. Borrowers can connect with their lenders for more information.
• SBA Express Bridge Loans are also available for small business owners who currently have a business relationship with an SBA Express Lender. Through this program, borrowers can access up to $25,000 to bridge the gap while applying for a direct SBA Economic Injury Disaster Loan. Again, you should contact your existing lender to see if they can participate in this program.
Not every program is the right fit for every small business owner, and we understand that applicants may feel pressure to get forms submitted quickly and accurately so they can access the funds they need. To that end, know that we are here to help - online and over the phone.
The SBA Illinois District Office is hosting two webinars each weekday, at 11 a.m. and 3 p.m., to walk through the loan programs and other assistance available. Register for an upcoming event at sbaillinois.eventbrite.com. Stay up to date with event announcements by following us on Twitter @SBA_Illinois and subscribing to our emails at sba.gov/updates. Additionally, you can email your questions to Illinois.do@sba.gov, and we'll do our best to find an answer. If you'd like to talk to a small business mentor, connect with one of SBA's many resource partners located across the state at sba.gov/local-assistance. They can work with you one-on-one to address unique challenges and build a recovery plan for the coming weeks, months, and years.
These are trying times - but the SBA is in your corner. Let us know how we can help.
• Robert Steiner is Illinois District Director of the U.S. Small Business Administration