The CARES Act has given business owners more options.
The CARES Act isn’t just about handing out $1,200 checks to most Americans. It also has its eye on lending a hand to small businesses.
The government’s Small Business Association (SBA) counts a small business as a corporation with less than 500 employees. Sole proprietors, independent contractors, and self-employed people who have employees also count.
So if that fits your organization, these benefits may be for you…
Want to keep your workers on payroll? The government wants the same thing, which is why it spent $349 billion to create the Paycheck Protection Program.
The SBA will give small businesses a loan to keep their employees on payroll for eight weeks – and the best part is that it will be fully forgiven if you do the following:
- Only use the loan for payroll, interest for mortgages, rent, and utilities
- Use at least 75% of the loan for payroll
- Maintain existing salary and full-time employee levels
If you don’t follow these rules, the loan payments will still be deferred for six months without any fees. No personal or collateral guarantees are required. The loan lasts for two years and has an interest rate of 1%.
The loan size varies from business to business. It can be for up to two months of your average monthly payroll costs from 2019, plus an extra 25% of that amount.
The program is running until June 30, so take advantage of it while you can. To apply, fill out this form and submit it to any federal bank. You can also submit the request online through Lender Gateway if you make an account.
The name is dramatic, but this loan could provide you with a business-changing amount of money.
Small businesses can now apply for a loan advance of up to $10,000 to provide relief for plunging revenues. The funds will be accessible within days of the application, and the loan advance doesn’t need to be repaid.
To apply, fill out this form.
Through March 13, 2021, businesses can apply for an express bridge loan that caps at $25,000.
The loan must be from an SBA Express Lender that you’ve borrowed from before, and the applicant must prove that they can’t receive credit from a non-federal source. The maximum loan term is seven years.
To apply, you must pay a fee of $250 or 2% of the loan amount – whichever one is greater. Interest can be 6.5% over the prime rate, depending on the lender’s terms.
To apply, you must fill out the following forms:
SBA isn’t just giving you loans – it’s also making it easier to pay them off, too.
SBA is automatically paying the principal, interest, and fees of current 7(a), 504 and microloans for six months. This perk will be available until Sep. 27.
And if you have a current SBA Serviced Disaster Loan that was in “regular servicing” status as of March 1, you’re in luck, too. The SBA is giving automatic payment deferments until Dec. 31, although interest will still accrue.
As of 2021, those who canceled automatic monthly payments will have to sign up for them again as well. To apply, contact your SBA lender.
Published by Debt.com, LLC