The Coronavirus Aid, Relief, and Economic Security Act (CARES) is the largest economic assistance bill in our country’s history. It allocates $2 trillion toward broad relief efforts, which includes significant funding for business relief through the SBA. We have included key information for lenders below.
Updates to Economic Injury Disaster Loans
The CARES Act creates new Emergency Economic Injury Grants under the SBA’s Office of Disaster Assistance to provide quick relief for applications awaiting processing of SBA Economic Injury Disaster Loans (EIDL). Loan applicants can receive up to $10,000 to cover immediate payroll, mortgage, rent, and other specified expenses. This is a forgivable loan advance and does not have to be repaid.
To access an Emergency Economic Injury Grant, a business must first apply for an EIDL and then request an advance.
Small Business Debt Relief Program
Small businesses currently with non-disaster SBA loans such as 7(a), 504, and microloans are eligible for debt relief. The SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.
Paycheck Protection Program Loans
The new Paycheck Protection Program (PPP) will provide fully federally-guaranteed loans help small businesses cover their near-term operating expenses and retain employees. Some or all of these loans may be forgiven if employers maintain their payroll at normal levels during the eight weeks after loan origination.
The application process will begin for small businesses and sole proprietorships on April 3, 2020, with independent contractors and self-employed individuals beginning April 10, 2020. Businesses may apply through any existing SBA 7(a) lender or any federally insured depository institution.
LendXP is receiving a high volume of inquiries and loan requests. We are prioritizing resources in order to provide the best service to the most people. Therefore, please note the following important information:
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Businesses in all States Eligible for SBA Economic Injury Disaster Loans
SBA Support for Businesses During Coronavirus