Business Relief during COVID-19 Crisis
This is truly an unprecedented time, with mandated business closings and uncertainty with re-opening, each and every business is impacted in different ways. This is a time when landlords and tenants have to come together to find creative solutions to accommodate each other’s needs. Small businesses are essential to maintaining a vibrant community and they need our support during this time.
Here is a list of SBA relief programs available to businesses with less than 500 employees:
- Paycheck Protection Loans – loans of up to $10 Million offered at .05% interest to be used for payroll, benefits, rent, and utilities. These loans are funded through banks, credit unions, and fintech lenders so funds should have faster turn around times than typical SBA loans. The amount for which a business qualifies is based on 2.5 times its average monthly payroll costs. Payments are deferred for the first six months and no collateral or personal guarantee is needed. Businesses must show the following in order to be eligible for the loan:
- Current economic conditions make the loan necessary to support ongoing operations
- Funds will be used for the purposes outlined
- Borrower is not making any duplicate loan requests under this section
Businesses can apply for loan forgiveness by submitting the following to the lender:
- Documentation verifying funds were used for the identified purposes
- Certification from a representative authorized to confirm documentation is true and correct and the amount
for which forgiveness is requested was used to retain employees
- Other documentation deemed necessary by SBA
- Expanded access to U.S. Small Business Administration Economic Injury Disaster Loans (EIDL) – loans of up to $2 million with a 3.75% interest rate and 10 year term. These are funded solely by the SBA and turn time on funds may be slower. Loan forgiveness is not available.
- Emergency Grant of $10,000 to SBA Economic Injury Disaster Loan Applications – businesses applying for EIDL can apply for a $10,000 grant which, if provided, will be available within three days and does not need to be repaid.
It is important that businesses apply early for these loans, there is a limited amount of funds available and these programs will be widely used. Talk to your existing business banker, if you do not have one look for banks that are SBA Preferred Lending Partners, those bankers will have familiarity with the SBA rules and will get your application processed faster.