Paycheck Protection Program (Emergency SBA 7(a) Loans)
Secs. 1102, 1106
Expanded EIDL & Emergency Grants (SBA 7(b) Loans)
Mid-Size Loan Program
||Emergency loan program for nonprofits and for-profit entities to secure funds to pay staff and operating costs for two months, and secure full loan forgiveness under certain circumstances.
||Existing Economic Injury Disaster Loan (EIDL) program expanded to more for-profit entities, applies looser credit standards, and creates a rapid grant procedure.
||Largely undefined loan program to be created by the Treasury Department to fill the gap between the Paycheck Protection Program for smaller employers and the industry stabilization loans to big business.
||500 or fewer employees
||Existing EIDL limits for nonprofits*
||Between 500 and 10,000 employees
||The lesser of $10 million or 2.5 times the average total monthly payroll costs from the one-year period (look back) prior to the date of application. Express 7(a) loans available up to $1 million.
||Normal EIDL loans available up to $2 million.
EIDL advances of $10,000 paid within 3 days.
||Local financial institutions
||Small Business Administration
||Local financial institutions
||Must have been in operation on 2/15/2020 and had paid employees and/or paid independent contractors. Expressly available for charitable nonprofits with 500 or fewer employees, but requires that employees of affiliated nonprofits may be counted toward the 500 employee cap, depending on the degree of control of the parent.
||In operation before 1/31/2020. Loans can be based solely on credit score.
Existing EIDL program applies to “private nonprofit organizations” that excludes religious institutions and some other charitable organizations.
|Expressly applies to “nonprofit organizations”
||No collateral or personal guarantee required.
||Waives personal guarantee up to $200,000, and requirement of inability to obtain credit elsewhere.
||Good-faith certification that need for the loan is based on economic conditions; funds to be used to retain workers and maintain payroll or make mortgage, lease, and utility payments; and no duplicate application or receipt of funds for same purposes.
||Self-certification under penalty of perjury.
|| Good-faith certification that need is based on economic conditions; funds to be used to retain and restore employment, won’t abrogate collective bargaining agreements, and will remain neutral in union organizing efforts, among other things.
||Payroll costs, mortgage interest payments, rent, utilities, and interest on prior debt during the 8-week period following loan origination.
||$10,000 advance: Paid sick leave, meeting payroll, increased costs due to disrupted supply chain, mortgage, debt service.
||To retain 90% of workforce at full wages and benefits through 9/30/2020 and intention to restore 90% of workforce in place on 2/1/2020.
||4% interest rate; first 6 months of payments (principal and interest) automatically deferred. Maximum of 10 years.
||Normal EIDL: 2.75% interest rate for nonprofits
$10,000 advance treated as a grant
|Interest capped at 2% with no principle or interest paid for first 6 months.
||Employers that maintain employment for the 8 weeks after origination of loan, or rehire employees by June 30, will have loans forgiven in whole or part, essentially turning the loan into a grant. Section 1106.
||$10,000 advance forgiven even if borrower denied EIDL loans.
||Expressly prohibited in statute. Section 4003(d)(3))
||Covered Period means the 8-week period following loan origination.
Employee means an individual working on a full-time, part-time, or other basis.
Payroll Costs include compensation (including benefits costs) paid to employees and contractors, capped at $100,000 per year per individual (prorated over the “covered” period), and state/local payroll taxes.
|Covered Period means 1/31/2020 through 12/31/2020.
Eligible entity means a business with 500 or fewer employees.
*Eligible private nonprofits include, without limitation, nursing homes, food kitchens, educational facilities, senior citizen centers, daycare centers, playhouses, and shelters, among others.
|Applications & Documentation
||SBA Instructions and sample application (posted 3/31/2020) For emergency EIDL Grant, apply here now.
For emergency EIDL Grant, apply here now.
For normal EIDL loans, complete SBA Form 5 online.
UPDATE - APRIL 16, 2020: SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.
Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.
| To be announced