Washington Update Special Edition – March 28
There are two new SBA loans for eligible nonprofits who are struggling as a result of Coronavirus.
The first are Economic Injury Disaster Loans, which provide up to $2 million in low interest loans to small businesses that can be repaid over as long as 30 years. These loans were funded in the first round of supplemental funding that was enacted two weeks ago and are up and running. Another $10 billion was allocated for EIDL’s in the third funding package that Congress will enact on Friday. Just for applying, you are able to receive $10,000 as a grant that does not need to be repaid, even if you are eventually turned down for the loan.
The second type of small business loan is the Paycheck Protection Program, which was created in this new round of funding to provide immediate assistance to businesses with up to 500 employees. There is $350 billion allotted for this loan program and it can be used for payroll, rent, mortgage, the things needed to keep the doors open for the next few months until coronavirus passes. If you keep your workforce intact over the next few months, the spending on these items becomes a grant that you do not need to repay. The loans can be up to $10 million in total and obtained at local financial institutions and fully guaranteed by SBA. There should be guidance out on this new program in the next week.
Lastly, if a member already has a relationship with SBA, it can get a SBA Express bridge loan to receive $25k in as little as 36 hours that can be applied to an EIDL loan.
The Chamber has just put out some helpful materials that might be helpful in explaining these loans (see links and PDF attached):
- Coronavirus Small Business Guide
- Everything You Need to Know About Federal Stimulus Programs for Small Businesses
- Everything You Need to Know About EIDL loans
- How to Apply for an EIDL Loan
- Infographic on the $350 billion Paycheck Protection Program 023595_comm_corona_virus_smallbiz_loan_final_revised