Do I Qualify for The Small Business Stimulus Loans?
To qualify for SBA funding under this new program, you must be a small business as defined by the SBA. This includes:
- Small businesses or non-profit 501(c)(3) organizations with 500 or fewer employees
- Small businesses, 501(c)(19) veteran’s organizations or tribal concerns that meet the SBA size standards (See SBA size standards here.)
- Sole proprietors or independent contractors
Businesses in the food or hospitality industry (NAICS codes beginning in (72) may be eligible on a per location basis.
In addition the normal affiliation rules are waived for franchises or businesses receiving financial assistance from a Small Business Investment Company.
The business must be in operation by February 15, 2020.
How Much Money Can I Borrow?
The basic answer is that the maximum loan amount is 2.5 times the average monthly payroll for the 12 months preceding the date the loan is made, up to a maximum of $10 million
Where Can I Get One of These Loans?
Individual lenders, including many banks, credit unions and some online lenders will make these loans.
What Can I Use the Funds For?
You can use the loan proceeds for:
- payroll costs;
- costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
- employee salaries, commissions, or similar compensations;
- payments of interest on any mortgage obligation (but not to pay principal or to prepay a mortgage)
- rent (including rent under a lease agreement);
- utilities;
- interest on any other debt obligations that were incurred before the covered period,
- refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020
How Fast Will I Have to Repay It?
These loans have a maximum term of two years. You can prepay at any time without penalty.
What Is the Interest Rate and Fees?
The interest rate for these loans will be 1% for all lenders that make them. Normal 7(a) loan fees are waived.
Is there a Personal or Business Credit Check?
None is required.
How Soon Do I Have to Start Making Payments?
Payments will be deferred for six months (though interest will accrue).
How Fast Will I Have to Repay It?
These loans have a maximum term of two years. You can prepay at any time without penalty.
How Soon Do I Have to Start Making Payments?
Payments will be deferred for six months (though interest will accrue).
How Do I Get Loan Forgiveness?
If you get one of these loans, you can request forgiveness of the principal portion of the loan for the eight week period after you get the loan that covers:
- Payroll costs
- Interest on a mortgage
- Rent
- Utilities
However, no more than 25% of the forgiven amount can be attributed to non-payroll costs.
Your loan forgiveness will be reduced if you decrease your full-time employee headcount. It will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annually in 2019. You may also receive forgiveness for additional wages paid to tipped workers.
In addition:
- Payroll includes the costs listed under the section “What Does Payroll Include?” below.
- Forgiven debt will not be taxable.
- The mortgage, rent and utilities covered in this section must be in place before February 15, 2020.