COVID-19 relief options: Small Business Administration
SBA offers several relief options to help businesses, nonprofits, and faith-based organizations recover from the impacts of COVID-19. Review all options or skip to a specific program in the information that follows.
SBA is currently offering the following funding options:
- Paycheck Protection Program loans:
“The PPP, which is overseen by the Small Business Administration, is arguably the most widely known pandemic relief program for businesses. It’s designed to incentivize small businesses to keep workers on the job by providing funding for payroll.
The biggest draw of this program is that while it is technically a loan, borrowers can have the amount written off if they apply for forgiveness within 10 months of the last covered period of their agreement. It’s basically free assistance for those who qualify for it.”
- COVID-19 Economic Injury Disaster Loan (EIDL):
“Also known as EIDL, this is another program overseen by the SBA and provides economic relief for small businesses as well as nonprofits that have suffered from a temporary loss of revenue. The assistance can be used to pay for financial obligations or operating expenses that a business would have been able to cover on its own had the pandemic not occurred.
Like the PPP, this program has been around for a while but has one key difference.
“It’s not forgivable,” Banda said. “But it’s still a pretty good option for businesses.”
Borrowers can also apply for both the PPP and EIDL, but funds from both are not allowed to be used for the same purpose. Applicants also must be physically located in the United States and have fewer than 500 employees.
The maximum loan amount is $150,000, with loans above $25,000 requiring collateral. The interest rate is 3.75% for businesses and 2.75% for nonprofits, with payment terms up to 30 years.
For more information or to apply for a loan, visit the SBA’s official EIDL website.”
SBA debt relief (for existing borrowers):
The SBA Debt Relief Program provides financial assistance for borrowers of three types of SBA loans:
As part of the program, the SBA will pay six months of principal, interest, and any associated fees owed by borrowers for such loans that are in “regular servicing status.” The assistance will be automatically provided without needing an application and will apply to loans that were approved up to September 7, 2020