Navigating you to the right financial program
Businesses across the country are currently facing unexpected financial strains due to the COVID-19 pandemic. Small businesses are suffering the most in this pandemic since they do not have the financial backup like bigger businesses. And a vast number of livelihoods are dependent on these small businesses. To prevent a collective economic collapse, the federal government has introduced the Small Business Administration (SBA).
This program offers financial advice and assistance to small business owners. After the amendments of the SBA 7(a) Loan Program under the CARES Act and the SBA(b), EIDL programs are made, the relief will be delivered to eligible businesses.
However, these financial programs, including loan programs, provisions, and terms, may not be open to every small business. There are specific eligibility criteria to make it through the application screening process to qualify for any financial assistance. And if one business qualifies for one such program, it will not receive any funds from other plans for the same purpose.
Further details of each program are given below for small business owners to self-assess the SBA eligibility and acquire more information.
Please keep in mind that these provisions are yet to be finalized. We are monitoring the situation closely and will notify you as soon as there is any update.
Loans under Paycheck Protection Program (Pending Finalization of CARES Act)
The CARES Act's authorization currently allows the SBA to loan up to $10million to small businesses under the SBA (a) amendment. Primary eligibility for a business is to have no more than 500 employees. If the company has a higher number of employees, the business size will fall under the SBA standard for the respective industry.
Loans under the EIDL Program
EIDL is the Economic Injury Disaster Loan program by the SBA that will provide loans to small businesses. Under the amendment SBA (b) act, each eligible company may receive up to $2 million worth of the loan.
To be eligible for this program, a business owner has to prove the economic injury and the reason being the COVID-19 pandemic. The interest on this loan will not be more than 4%.