- The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.
Loan Terms & Conditions
- Eligible businesses: All small businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
- Maximum loan amount up to $10 million
- Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
- All loans under this program will have the following identical features:
- Interest rate of 1% (according to a press conference yesterday the Treasury has had to adjust the interest rate as requested by the participating U.S. banks).
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
SBA’s announcement comes on the heels of a series of steps taken by the Agency since the President’s Emergency Declaration to expeditiously provide capital to financially distressed businesses affected by the Coronavirus (COVID-19) pandemic. Since March 17, SBA has taken the following steps:
- Declared all states and territories eligible for Economic Injury Disaster Loan assistance
- 1-year deferment on Economic Injury Disaster Loans provided due to COVID-19
- Automatic deferment of previous disaster loans for homeowners and businesses through 2020
- Waiver of garnishments through 2020
Visit SBA.gov/Coronavirus for more information on SBA’s assistance to small businesses.
Summary of The Cares Act: Coronavirus Aid, Relief, and Economic Security Act or the CARES Act
The CARES Act was signed by President Trump and became law on March 27, 2020.
To read, download or print the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act visit https://www.congress.gov/116/bills/thecaresact.
This bill responds to the COVID-19 (i.e., coronavirus disease 2019) outbreak and its impact on the economy, public health, state and local governments, individuals, and businesses.
The bill provides FY2020 supplemental appropriations for federal agencies to respond to the COVID-19 outbreak.
The supplemental appropriations are designated as emergency spending, which is exempt from discretionary spending limits.
In addition, the bill
- funds various loans, grants, and other forms of assistance for businesses, industries, states, local governments, and hospitals;
- provides tax rebates of up to $1,200 per individual and an additional $500 per child, subject to limits based on adjusted gross income;
- temporarily expands unemployment benefits; and
- suspends payments and interest on federal student loans.
The bill includes several other provisions that modify a wide range of programs and requirements, including those regarding
- oversight of the activities and funding authorized by this bill;
- the tax treatment of withdrawals from retirement accounts, business income, losses, and charitable contributions;
- medical product supplies;
- health insurance coverage for COVID-19 testing and vaccinations;
- the health care and aviation workforces;
- mortgage payments, evictions, and foreclosures for properties with federally backed mortgages;
- student loans and financial aid;
- aviation excise taxes;
- Medicare and Medicaid;
- the Food and Drug Administration drug approval process;
- the emergency paid sick leave program;
- banking and accounting rules; and
- the U.S. Postal Service’s borrowing authority.
Health and government officials are working together to maintain the safety, security, and health of the American people. Small businesses are encouraged to do their part to keep their employees, customers, and themselves healthy.
Content Below
- Coronavirus Funding Options
- Guidance for Businesses and Employers
- Local Assistance
- Join the SBA’s Relief Efforts
- SBA Products and Resources
- Government Contracting
Coronavirus Funding Options
Click here to learn more about available SBA loan and debt relief options.
Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus (COVID-19) outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses.
To learn more about the relief options available for your business, click here.
Guidance for Businesses and Employers
The President’s Coronavirus Guidelines for America – 30 Days to Slow the Spread
The Centers for Disease Control and Prevention (CDC) offers the most up-to-date information on COVID-19. This interim guidance is based on what is currently known about the coronavirus disease 2019 (COVID-19). For updates from the CDC, please see the following:
- Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19)
- Preventing Stigma Related to COVID-19
- Share Facts about COVID-19
- CDC Coronavirus Disease 2019 (COVID-19) Web page
- Information on Coronavirus Disease 2019 (COVID-19) Prevention, Symptoms and FAQ
The following interim guidance may help prevent workplace exposure to acute respiratory illnesses, including COVID-19, in non-healthcare settings.
The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19.
• To prevent stigma and discrimination in the workplace, use the guidance described below and on the CDC’s Guidance for Businesses and Employers web page.
Below are the recommended strategies for employers to use now. In-depth guidance is available on the CDC’s Guidance for Businesses and Employers web page:
- Actively encourage sick employees to stay home
- Separate sick employees
- Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees
- Perform routine environmental cleaning
- Advise employees before traveling to take certain steps
- Check the CDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from designated countries with risk of community spread of Coronavirus, and information for aircrew, can be found on the CDC website.
- Additional Measures in Response to Currently Occurring Sporadic Importations of the COVID-19:
- Employees who are well but who have a sick family member at home with COVID-19 should notify their supervisor and refer to CDC guidance for how to conduct a risk assessment of their potential exposure.
- If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for how to conduct a risk assessment of their potential exposure.
Common Issues Small Businesses May Encounter
• Capital Access
Incidents can strain a small business’s financial capacity to make payroll, maintain inventory and respond to market fluctuations (both sudden drops and surges in demand). Businesses should prepare by exploring and testing their capital access options so they have what they need when they need it. See SBA’s capital access resources.
• Workforce Capacity
Incidents have just as much impact on your workers as they do your clientele. It’s critical to ensure they have the ability to fulfill their duties while protected.
• Inventory and Supply Chain Shortfalls
While the possibility could be remote, it is a prudent preparedness measure to ensure you have either adequate supplies of inventory for a sustained period and/or diversify your distributor sources in the event one supplier cannot meet an order request.
• Facility Remediation/Clean-up Costs
Depending on the incident, there may be a need to enhance the protection of customers and staff by increasing the frequency and intensity by which your business conducts cleaning of surfaces frequently touched by occupants and visitors. Check your maintenance contracts and supplies of cleaning materials to ensure they can meet increases in demand.
• Insurance Coverage Issues
Many businesses have business interruption insurance; Now is the time to contact your insurance agent to review your policy to understand precisely what you are and are not covered for in the event of an extended incident.
• Changing Market Demand
Depending on the incident, there may be access controls or movement restrictions established which can impede your customers from reaching your business. Additionally, there may be public concerns about public exposure to an incident and they may decide not to go to your business out of concern of exposing themselves to greater risk. SBA’s Resources Partners and District Offices have trained experts who can help you craft a plan specific to your situation to help navigate any rapid changes in demand.
• Marketing
It’s critical to communicate openly with your customers about the status of your operations, what protective measures you’ve implemented, and how they (as customers) will be protected when they visit your business. Promotions may also help incentivize customers who may be reluctant to patronize your business.
• Plan
As a business, bring your staff together and prepare a plan for what you will do if the incident worsens or improves. It’s also helpful to conduct a tabletop exercise to simulate potential scenarios and how your business management and staff might respond to the hypothetical scenario in the exercise. For examples of tabletop exercises, visit FEMA’s website at https://www.fema.gov/emergency-planning-exercises.
Local Assistance
SBA works with a number of local partners to counsel, mentor, and train small businesses. The SBA has 68 District Offices, as well as support provided by its Resource Partners, such as SCORE offices, Women’s Business Centers, Small Business Development Centers, and Veterans Business Outreach Centers. When faced with a business need, use the SBA’s Local Assistance Directory to locate the office nearest you.
SBA Products and Resources
SBA is here to assist small businesses with accessing federal resources and navigating their own preparedness plans as described by the CDC’s Guidance for Businesses and Employers.
SBA works with a number of local partners to counsel, mentor and train small businesses. The SBA has 68 District Offices, as well as the support provided by its Resource Partners, such as SCORE offices, Women’s Business Centers, Small Business Development Centers, and Veterans Business Outreach Centers.
When faced with a business need, use the SBA’s Local Assistance Directory to locate the office nearest you.
Access to Capital
SBA provides a number of loan resources for small businesses to utilize when operating their business. For more information on loans or how to connect with a lender, visit: https://www.sba.gov/funding-programs/loans.
- 7(a) program offers loan amounts up to $5,000,000 and is an all-inclusive loan program deployed by lending partners for eligible small businesses within the U.S. States and its territories. The uses of proceeds include working capital; expansion/renovation; new construction; purchase of land or buildings; purchase of equipment, fixtures; leasehold improvements; refinancing debt for compelling reasons; seasonal line of credit; inventory; or starting a business.
- Express loan program provides loans up to $350,000 for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.
- Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.
- 504 loan program is designed to foster economic development and job creation and/or retention. The eligible use of proceeds is limited to the acquisition or eligible refinance of fixed assets.
- Microloan program involves making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan size of $14,000.
Exporting Assistance
SBA provides export loans to help small businesses achieve sales through exports and can help these businesses respond to opportunities and challenges associated with trade, such as COVID-19.
The loans are available to U.S. small businesses that export directly overseas, or those that export indirectly by selling to a customer that then exports their products.
- Export Express loan program allows access to capital quickly for businesses that need financing up to $500,000. Businesses can apply for a line of credit or term note prior to finalizing an export sale or while pursuing opportunities overseas, such as identifying a new overseas customer should an export sale be lost due to COVID-19.
- Export Working Capital program enables small businesses to fulfill export orders and finance international sales by providing revolving lines of credit or transaction-based financing of up to $5 million. Businesses could use a loan to obtain or retain overseas customers by offering attractive payment terms.
- International Trade loan program helps small businesses engaged in international trade to retool or expand to better compete and react to changing business conditions. It can also help exporting firms to expand their sales to new markets or to re-shore operations back to the U.S.
Government Contracting
SBA is focused on assisting with the continuity of operations for small business contracting programs and small businesses with federal contracts. For more information on federal contracting, visit https://www.sba.gov/federal-contracting/contracting-guide.
More specifically:
- 8(a) Business Development program serves to help provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities, and the government limits competition for certain contracts to businesses that participate. The 8(a) program offer and acceptance process is available nationwide, and the SBA continues to work with federal agencies to ensure the maximum practicable opportunity to small businesses. 8(a) program participants should stay in touch with their Business Opportunity Specialist (BOS).
- HUBZone program offers eligibility assistance every Thursday from 2:00-3:00 p.m. ET at 1-202-765-1264; access code 63068189#. Members of the HUBZone team answer questions to help firms navigate the certification process. For specific questions regarding an application, please contact the HUBZone Help Desk at hubzone@sba.gov.
- Women-owned Small Business firms who have questions, please visit www.sba.gov/wosbready or write to wosb@sba.gov.
If a situation occurs that will prevent small businesses with government contracts from successfully performing their contract, they should reach out to their contracting officer and seek to obtain extensions before they receive cure notices or threats of termination.
The SBA’s Procurement Center Representatives can assist affected small businesses to engage with their contracting officer. Use the Procurement Center Representative Directory to connect with the representative nearest you.