The pipelines for the second round of Coronavirus Aid, Relief and Economic Security (CARES) Act funding are opening now, and here are some quick facts to share with small businesses in your district:
Paycheck Protection Program
The Paycheck Protection Program (PPP) of forgivable loans opened on Monday, Jan. 11th, to first-time applicants. It will open to second-time applicants on Wednesday, Jan. 13th with somewhat tighter restrictions favoring smaller businesses and nonprofits that have been hardest hit by the pandemic. Community Development Financial Institutions (CDFI) and Minority Depository Institutions (MDI) will have a head start for an unspecified period of time before other financial institutions will begin accepting PPP applications. A complete list of CDFIs in Virginia can be found here, and a complete list of MDIs in Virginia can be found here.
Economic Injury Disaster Loans
The deadline for applying to the U.S. Small Business Administration (SBA) for Economic Injury Disaster Loans (EIDL) has been extended to Dec. 31, 2021. Small businesses will get $1,000 per employee as a one-time emergency grant up to $10,000 regardless of whether or not their loan is approved. Loans come with a 3.75% interest rate for small businesses. They include a 30-year maturity and an automatic deferment of one year before monthly payments begin. Businesses can use the loan for working capital and operating expenses, including the continuation of health care benefits, rent, utilities and fixed debt payments. To be eligible for the loan, businesses should provide collateral for over $25,000. Collateral can be machinery and equipment, furniture and fixtures and others.
SBA Debt Relief
The SBA Debt Relief program has been automatically extended for an additional three months to all note holders of SBA 7(a) loans (they should know who they are). There is nothing that the business needs to do to access this program. It will kick in automatically through their financial institution. SBA Debt Relief will be extended for an additional five months (eight months in total) for businesses that are classified as eating or drinking establishments (NAICS code beginning with 61, 71, 72, 213, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532 or 812). These payments will begin in Feb. 2021 if they have stopped. If SBA Debt Relief payments have not yet stopped, the three- or eight-month extension will be added to six months of payments already in progress.
SBA Express Bridge Loan
The SBA Express Bridge Loan program remains open, and up to $25,000 can be accessed through an SBA Express Lender with whom a business has an existing relationship. SBA Express Bridge Loans maintain a quick turnaround and will be repaid when the EIDL loan is approved.
Stay tuned for additional updates as they become available!
Image Credit: www.sportsconnect.com