Which SBA Loan should I choose?

The Small Business Administration has published a site outlining many loan options that employers can use to get through the COVID-19 retraction. These loans are not tax initiatives thus we cannot provide advice on these loans.

Paycheck Protection Program (PPP)

This could be a good option for your business if you have employees and you expect to be able to keep your employees at current levels for the next 2 months.

The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.

Under this program:

  • Eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount.
  • Loan payments will be deferred for six months.
  • If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.

Click here to learn more.

Economic Injury Disaster Loans (EIDL) and Loan Advance

This could be a good option for you whether you have employees or not.

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The CARES Act makes these loans available to more businesses with eased credit/collateral restrictions.

Eligible applicants for an EIDL can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020).

There is no obligation to repay the grant if the money is spent on qualified expenses. To receive the $10,000 emergency grant you just have to APPLY for the loan. It is not necessary to have an approved EIDL loan. However, if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount

To apply for a COVID-19 Economic Injury Disaster Loan, click here.

SBA Debt Relief

The SBA Debt Relief program will provide a reprieve to small businesses as they overcome the challenges created by this health crisis.

Under this program:

  • The SBA will also pay the principal and interest of new 7(a) loans issued prior to September 27, 2020.
  • The SBA will pay the principal and interest of current 7(a) loans for a period of six months.

SBA Express Bridge Loans

Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.

Terms

  • Up to $25,000
  • Fast turnaround
  • Will be repaid in full or in part by proceeds from the EIDL loan

Find an Express Bridge Loan Lender by connecting with your local SBA District Office.

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