COVID-19 Relief Resources For Small Business Owners

COVID-19 Relief Resources For Small Business Owners

Are you a small business owner who was affected by coronavirus lockdown requirements? The Small Business Administration was suddenly thrust into the limelight during the earliest weeks of the COVID-19 pandemic in America and much has been made of the Paycheck Protection Program (PPP) and other measures drafted as part of the economic stimulus effort to shore up the U.S. economy.

But PPP isn’t the only relief available for small businesses. That program itself, which offers an SBA-backed loan that is forgivable when the company meets certain conditions for retaining employees. This is a temporary expansion of the SBA 7(a) Loan program.

There was an initial round of PPP funding, but a second round of applications was being accepted starting on April 27, 2020. But what other options are open to small businesses?

Economic Injury Disaster Loan Advance

This SBA-backed program offers up to ten thousand dollars worth of economic relief to small businesses “experiencing a temporary loss of revenue”. That loan advance does not have to be repaid, but at press time that relief is now open only to qualifying U.S. agricultural businesses.

SBA-Backed Express Bridge Loans

Companies that already have a business relationship with a participating SBA Express Lender can apply for a fast-tracked loan up to $25,000. According to SBA literature, these  Express loans “can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing”. These loans can be offered as “term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.”

But some small businesses need cash in the meantime while waiting for an Express Loan application to be processed. In such cases, the SBA urges an application for the SBA Express Disaster Bridge Loan.

SBA Debt Relief

Small business borrowers who already have business loans such as the 7(a) loan, a 504 loan, or a Microloan “in regular servicing status” may be eligible for assistance from the SBA in the form of six months of payments applicable to principal, interest, and fees associated with such small business financing.

These loans must have funds disbursed before Sept. 27, 2020. This relief money is not offered for PPP loans.

Unlike many other programs, the SBA Debt Relief option actually requires NO application; SBA literature states it will automatically be offered under the following conditions:

  • Loans not on deferment–SBA offers payments for six months;
  • Loans currently on deferment, SBA begins payments with the next payment due after the deferment period has ended for six months.
  • For loans made after March 27, 2020, and fully disbursed prior to Sept. 27, 2020, SBA makes payments with the first payment due on the loan for six months.

SBA does not issue loans, it backs them and the actual loan is offered via a participating lender. Many large banks offer SBA loan services on their official sites, or you can explore the SBA official site to learn more.

Editors note: This article was made possible by generous support from our sponsor Property Finance Partners Bridging loans.  Located in the United Kingdom Property Finance Partners is a top bridging loan broker located in the UK.  Email them to discuss your bridging loan needs.