SBA Coronavirus Loan Resources and FAQ

By Nicole Martin | March 31, 2020

Thanks to Senator Rubio and Senator Cardin with #10KSB Small Business Community who answered the following questions to help small businesses navigate benefits during this time.

What is the paycheck protection?

A year from now will come the time to close the books on this.

Payment Protection loans for payroll, rent, lease and utilities are 100% forgivable (these monies MUST be spent on the approved expenses) but if you don’t use that for that purpose it will convert into a low interest loan. Access and Timeline can be provided by your lender.

What are the criteria for applying for a loan?

Senator Rubio shared the criteria is to meet SBA criteria or 500 employees or less. We cannot make any lender be a facilitator but every lender that participates (over 800) are authorized by the law to authorize lending as all 7(a) lenders can do loans as preferred lenders. They are seeking more lenders and Treasury is working on the pathway and additional lenders may be attracted to it. Senator Cardin shared that we want lenders to lend to ALL small businesses to make it easier to gain access to the loans. Employers will have to demonstrate their average payroll and their FEIN. The emergency loans and grants and those guidelines will be established by the end of this week. Grants will be expedited and in some cases as quick as three days. The turnaround time will depend greatly on the bank but there should not be a government delay. We recommend you work with your bank as they can quickly verify your payroll. It was designed to be quick and simple.

With all the help available, how do we identify the best way to go without exemption ourselves from some other option?

These programs are coordinated and some will not allow dual benefits. Go to the Small Business Development Centers or WBDC as they have received guidance to answer that question. The SBA website is also informative and all of the resources are built for online application but they advise you use your resources.

What is the difference between State and Federal Aid?

Governors run State program’s and some are for 50 workers or fewer. These are different programs and there are no restrictions at the federal level to apply to State programs. Recommend you check with States respectively. The measures approved last week were considered Emergency expenditures and we are not done with legislation as we still do not know the long term impact. We do anticipate the Congressional body could do more but we need this to work first.

Do you see small businesses playing a greater role or a changing role post Covid-19?

We feel small business owners can help us as we deal with the requirements of public health. We empathize and want small business owners to support their workforce with paychecks and keep the workforce intact so the economy can respond faster once this crisis is over. We don’t want you to have to recreate your workforce. Larger companies have an easier time getting workers so this is what we are looking to small business to do with us. We don’t know what the changes will be but something this global crisis will expand on what is critical for our country to be able to make domestically. Be it a healthcare crisis or military crisis, but small business can play a key role in this regard.

Small Business impact?

You can’t cut your hair in this country right now? We say the country is built on the backbone of small business but that is now very clear. We all have extensive links to small business owners. There will be owners that can’t pay their rent this month and this is our concerted effort to see that the small business community survives. We would like to know that small businesses keeping payroll, worked. Did it make sense? Sure, there is unemployment but wouldn’t you rather keep your people. The Congressional body wants feedback on this and also where there are loopholes or abuses. Feedback on this will be sought.

Cash Payment Program?

This will be for anyone who filed taxes last year. There is a sliding scale based on the income. If you are set up for electronic transfer with the IRS, it will be done and those receiving Social Security will also receive this payment. Those on Disability may not get it unless they file their taxes. Mailed payments will take longer. You completely phase out at approximately $150k for individuals or $200K as a married couple.

Need a summary of the CARES Act?

We shared a summary here.