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The new Coronavirus Aid, Relief, and Economic Security (CARES) Act has appropriated $377B in funds for small businesses.  To help you decide what's best for your business, we've broken down the two options for financial relief, both administered through the U.S. Small Business Administration (SBA).

Highlights from the CARES Act

$300B in relief for you and your customers is coming

American singles making $99k or less, or households making $198k or less, should see funds in as soon as 3 weeks.   

Businesses are getting a tax break

Business and income taxes will be deferred, and if you've fixed up your store over the last 2 years, it should be easier to write off that expense.

Plus, additional support for our communities

There will be vastly expanded unemployment benefits, support for our healthcare system, and more.

Decide which option is best for you

The overall package is pending guidance from the Small Business Administration (SBA), but there are steps to take now. If you apply for loans from different sources, rules or limitations may apply. While your circumstances may affect your options, we hope this informational resource helps, and encourage you to also seek personalized advice from qualified professionals.

Get a $10,000 grant in 3 days or less

The Economic Injury Disaster Loan (EIDL) is an emergency program offering small business loans up to $2M. It also includes a grant for eligible businesses to receive a cash advance of up to $10,000 that you're not required to repay.

Who should consider EIDL?


Smaller businesses who require less cash Loans are available up to $2M per business. You may want to consider this option if you have less than $65k in annual operating costs—the advance may be greater than the loan forgiveness. You can qualify for up to $200k without a personal guarantee or collateral.
Businesses who need immediate cash If the 3-day $10,000 disbursement will help you pay payroll, provide sick leave, or finance debt, you may want to consider this option.




Who's eligible?


The CARES Act waives any existing rules related to the personal guarantee on advances and loans of not more than $200,000 during the period of January 31, 2020 and ending December 31, 2020. The CARES Act does not expressly mention collateral requirements and the existing collateral requirements for EIDL (which generally requires a collateral for loans exceeding $25,000) appear to apply.
Under the CARES Act, no requirement that the applicant not be able to obtain credit elsewhere.




What's the application process?


The grant application is available online through the SBA’s application portal.
The application should only take about 5 minutes.
After applying, expect the approval and payment process to take about 3 weeks.




What factors are considered by the lender?


The SBA may approve the applicant based solely on the applicant’s credit score and not require a tax return or tax return transcript or use alternative appropriate methods to determine the applicant’s ability to repay the loan.




What paperwork will I need?


You'll just need your credit score and the new self-certification form—no tax returns required. The new form isn't available yet, but you can apply now using the standard form.




How soon will I see relief?


The $10,000 grant will be administered within 3 days of submitting your application. Additional loan relief is being offered on a first come, first serve basis to businesses across all 50 states, so you may see longer wait times for loans.




Are there any collateral, personal guarantee or credit requirements?


The CARES Act waives any existing rules related to the personal guarantee on advances and loans of not more than $200,000 during the period of January 31, 2020 and ending December 31, 2020. The CARES Act does not expressly mention collateral requirements and the existing collateral requirements for EIDL (which generally requires a collateral for loans exceeding $25,000) appear to apply.
Under the CARES Act, no requirement that the applicant not be able to obtain credit elsewhere.





Get 8 weeks of operating expenses back

The Paycheck Protection Loan (PPL) program offers approved business owners 100% federally guaranteed loans up to $10M and forgives up to the amount spent on operating expenses during the first 8 weeks of the loan. The amount of money from the loan you spend to cover payroll, rent, utilities, or mortgage payments and associated interest can be forgiven. Any other payments can be deferred by 6-12 months.

Who should consider PPL?


Medium-sized businesses who need more cash Relief from the PPL program will go up to the lesser of $10M per business or 250% of monthly payroll expenses (including certain benefits), while the EIDL program is capped at $2M.
Businesses with over $65k in annual operating costs A business with at least $65k in annual operating expenses covered by the loan can get 8 weeks of that back, equalling a $10k reimbursement or more.




Who's eligible?


Any business that has been operating on February 15, 2020 (i) with less than 500 employees (including sole proprietors, self-employed, and "gig economy" individuals), (ii) which meet the SBA's existing Size Standard guidelines, or (iii) in the hospitality/food services industries with more than one physical location so long as there are no more than 500 employees per physical location. Certain restrictions may apply if you have affiliates or outside investors.
Any business who maintains payroll until at least June 30, 2020 is eligible for loan forgiveness. The amount of forgiveness is reduced proportionally by any decreased employee compensation exceeding 25% or number of employees persisting during the first 8 weeks of the loan relative to a recent qualified period Companies can correct past reductions in payroll by rehiring or remedying compensation by June 30, 2020 to receive full loan forgiveness.




What's the application process?


The current application is long and complicated. The SBA has up to 15 days to establish new rules, and it's likely that they will shorten the application dramatically. For now, talk to an SBA-approved lender to understand their requirements.
You can either apply through the SBA or directly with any number of SBA-approved lenders, like J.P. Morgan or Wells Fargo. The number of available lenders is expected to increase to meet the demand.
The application deadline is June 30, 2020.




What factors are considered by the lender?


Lender only considers whether the business was in operation as of February 15, 2020 and whether it had employees for whom it paid salaries and payroll taxes or paid independent contractors.




What paperwork will I need?


As it's set up today, this option requires a lot of paperwork. We're hopeful that the amount required will be reduced, but here are some helpful documents to have ready:

  • 3 years of income tax returns
  • Profit and loss (P&L) statement
  • Projected financial statements
  • Names and addresses of any subsidiaries
  • Business certificate or license
  • Loan application history
  • Business lease
  • Your résumé




How soon will I see relief?


Loans from the SBA have historically taken about 45 days, but we’re hopeful that funds will be distributed faster. The CARES Act is removing steps to help expedite relief, including allowing approved lenders to make decisions on applications without having to go back to the SBA for approval. The SBA is also bringing on new lending partners to help with quicker fund dispersal.




Are there any collateral, personal guarantee or credit requirements?


No collateral or personal guarantee required and no requirement that the applicant not be able to obtain credit elsewhere.





Business Resources by State

See a list of state, local and private resources available to small businesses. This list will be continuously updated as new programs and information become available.  VIEW RESOURCES

SBA Loan Guidance and Resources

Updated guidance and resources from the Small Business Administration (SBA).  LEARN MORE

Direct links to SBA online loan application

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