The Small Business Administration (SBA) offers many loan options to business owners. There are new loan products available through the SBA following the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES).
Some of the SBA loan products contain language indicating the potential for a portion of the loan may be converted to a grant and not required to be paid back. Given these products are evolving and the banks are working to understand the exact requirements, we encourage you to contact your representative at your commercial lending office you primarily do business with. The application process for SBA loans begins with your representative at your commercial bank, who facilitates the process with the SBA.
Visit the link below for resources on SBA loan products, including eligibility, terms and more:
Highlighted Below are the (3) Most Popular SBA Loans
Economic Injury Disaster Loan (EIDL)
- The purpose of this loan is to supplement lost revenue as a result of COVID-19
- The funds can be used for payroll expenses, fixed debts, accounts payable, etc.
- Interest rates would start around 3.75% (subject to change).
- There is no loan forgiveness component to this loan type. However, there is an Emergency Advance Grant of up to $10,000 associated with the EIDL for small businesses and private non-profit organizations.
Emergency Advance Grant (through the EIDL)
- The Emergency Advance Grant does not need to be repaid under any circumstance.
- If eligible, there appears to be no downside to obtaining the Advance Grant through the EIDL program. If you do not want to take advantage of the loan component of the EIDL, you can then refuse any additional assistance offered. Our understanding suggests you can obtain the EIDL Advance Grant and then choose not to move forward with the full EIDL loan process.
- Important Note: You must check the box on the final screen of the EIDL application to receive the Advance Grant.
- The EIDL Advance Grant will reduce how much you are eligible to borrow through the Paycheck Protection Loan.
- This application is submitted directly through the SBA. The link to apply along with helpful information for the loan itself and the application process are listed below.
Paycheck Protection Loan (PPP/PPL)
The application process for the PPP Loan is directly through your commercial bank. As such, the application and process may differ by bank. Here's a list of documents that will likely be requeired for the PPP Loan Application:
SBA Traditional 7A Loans
- New money for recovery purposes, unrelated to COVID-19
- Interest rate is subject to SBA market rates.
- There is no loan forgiveness component to this loan type.
We have linked the resources below from government agencies regarding these loan opportunities. Simply click the link to access the listed document.
As additional information becomes available on these topics we will continue to update the content on this page for your reference.