Recently Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The legislation is aimed at providing relief for individuals and businesses that have been negatively impacted by the coronavirus outbreak.
The CARES Act provides small businesses with access to the SBA Economic Injury Grant Program, the Paycheck Protection Loan Program, in addition to the SBA Economic Injury Disaster Loans that were previously made available.
Here is a summary of the current programs available to small business with less that 500 employees:
- SBA Economic Injury Disaster Loans: Fixed rate (3.75%) loans for up to 30 years. Total terms are determined on a case by case basis by the SBA. SBA expects to give applicants decisions within 3 to 4 weeks; however, it could be up to 6 six weeks.
- SBA Economic Injury Grant Program: This program is part of the Economic Injury Disaster Loan Program. Applicants can apply for up to $10,000 in grant funding. You must submit an Economic Injury Disaster Loan application. If, you meet the criteria, you will be advanced up to $10,000 within 3 business days that does not need to be repaid. The grant is available to applicants whether or not the loan application is approved.
- The Paycheck Protection Loan Program: The loan is available through existing SBA 7(a) lenders to provide small business loans on favorable terms to borrowers impacted by the current state of economic uncertainty. Loans are available up to $10 million with an option to receive loan forgiveness if you maintain payroll. If not forgiven the rate is .5% with a term of two years.
For more information on the SBA small business assistance please visit: https://covid19relief.sba.gov/#/. For information on Covid-19 Iowa Business Recovery Assistance please visit: https://www.iowaeconomicdevelopment.com/our-agency-detail-resources/6710.