Small businesses that want to stay open and rehire and retain employees may do so, thanks to the “Coronavirus Aid, Relief, and Economic Security Act” or CARES Act.
Owners may apply for a low-interest Economic Injury Disaster Loan advance of up to $10,000 and up to $2 million for working capital. From the U.S. Small Business Administration (SBA) [emphasis added]:
The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
Small businesses that take advantage of the disaster loans will get some help while they’re recouping losses during the COVID-19 pandemic:
The SBA Debt Relief program will provide a reprieve to small businesses as they overcome the challenges created by this health crisis.
Under this program:
–The SBA will also pay the principal and interest of new 7(a) loans issued prior to September 27, 2020.
–The SBA will pay the principal and interest of current 7(a) loans for a period of six months
The SBA is also offering the Express Bridge Loan Pilot Program to small businesses already working with an SBA Express Lender. These businesses may apply for up to $25,000 “with less paperwork.”
These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
See the SBA’s COVID-19 page for more resources during this critical time.