COVID-19 Business Disaster Recovery Assistance

The Coronavirus Aid, Relief and Economic Security Act,
CARES Act for Small Businesses

Passed by Congress and signed by the President, the Coronavirus Aid, Relief, and Economic Security (CARES) Act tasks the U.S. Small Business Administration (SBA) with overseeing the distribution of millions of dollars in loans and grants to help small businesses survive the COVID-19 pandemic. It also provides additional funding for SBA’s resource partners to provide advice and training to help small businesses respond to the unprecedented challenges in communities throughout the country.

A Comparison of Small Business Disaster Loans
Available Through the CARES Act

 

 

 

LOANSLoans Icon

 

Paycheck Protection Program
(PPP)

 

Economic Injury Disaster Loan
(EIDL)
& Emergency Advance Grant

 

 

 

 

Main Street Lending Program

 

ABOUTAbout Icon

 

Short-term, potentially forgivable loans to eligible small businesses that retain employees, maintain payroll, and use for other allowable operating expenses.

PPP loans are administered and approved through SBA-certified lending institutions.

 

Long-term, low-interest working capital disaster loans for qualified small businesses and U.S. agricultural businesses that suffered substantial economic injury due to COVID-19.

EIDLs are administered and approved directly by the SBA.

       

Offers three short-term loan options for businesses to maintain operations and keep employees:

Main Street New Loan Facility (MSNLF)

Main Street Priority Loan Facility (MSPLF)

Main Street Expanded Loan Facility (MSELF)

Established by the Federal Reserve and approved through U.S.-insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies.

 
FINANCING

 

Amount: Lesser of 2.5x average monthly payroll costs, or $10 million
Interest and Terms: 1% for a term of five years for any amount not forgiven
Collateral: None
Personal Guarantee: None

 

Amount: Up to $2 million
Interest and Terms: 3.75% for a term up to 30 years
Collateral: Loans of more than $25,000
Personal Guarantee: Loans of more than $200,000
        Amount: $250,000 up to $300 million, depending on the loan option chosen
Interest and Terms: Adjustable rate of LIBOR (1 or 3 mo.) plus 300 basis points; loan term is 5 years
Fees: Origination and transaction fees may apply
 
ELIGIBILITYEligibility Icon

 

Private small businesses that have less than the greater of—

  • 500 or fewer employees whose principal place of residence is in the United States, or
  • SBA employee or revenue-based size standards for the industry that the business operates.

Accommodation and Food Service (NAICS 72) businesses based on per location.

 

Small businesses with less than 500 employees (including sole proprietorships, independent contractors, and self-employed persons), private non-profit organizations, or 501(c)(19) veterans organizations affected by COVID-19 are eligible

Agricultural businesses are also eligible, including those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).

U.S. businesses, with significant operations in and a majority of its employees based in the United States, may be eligible for loans if they were established prior to March 13, 2020 and meet either of the following conditions:

  1. the business has 15,000 employees or fewer, or
  2. the business had 2019 revenues of $5 billion or less.
FORGIVENESSForegiveness Icon

 

Eligible—Limited to the amount spent on payroll costs and allowable operating expenses during the 24-week period beginning on the date of the origination of the loan.

At a minimum, 60% must be expended on payroll costs to be forgiven.

 

 

The EIDL loan is not forgivable, however, you may apply for an EIDL loan advance, which you do not have to pay back. Applicants may request at the time of application a loan advance of up to $10,000 ($1,000 per employee).

 

No
USEUse Icon
Proceeds may be used to pay payroll costs, mortgage interest, rent, utilities, and interest on pre-existing loans.

 

 

Proceeds may be used to pay fixed debts, payroll, accounts payable, rent, utilities, and other bills that cannot be paid because of the disaster’s impact. Proceeds are designed to help businesses maintain operations and keep employees.
 
 
             
 
DEADLINEDeadline Icon
Closed August 8, 2020

 

 

December 31st, 2020         Closed September 30, 2020  
 
 
             
APPLY NOWApply Now Icon

 

Contact your local bank, credit union, or other SBA-certified lender to apply or for more information. Applicants can download a copy of the PPP borrower application form to see the information that will be requested when you apply with a lender.

 

Apply online directly with the U.S. SBA at https://covid19relief.sba.gov

Note: You can apply for both PPP and EIDL—you just can’t use the funds for the same purpose.

Contact a U.S.-insured depository institutions, U.S. bank holding companies, and U.S. savings and loan holding companies.