The Evolving CARE Stimulus Plan - What You Need to Know as a Small Business Owner

13
May 2020

Both the EIDL (Economic Injury Disaster Loan) and PPP (Paycheck Protection Program) are close to running out of funding again. Most banks are not accepting new PPP loans now. We believe a new way of relief funding will pass through Congress and will receive the President's approval after Memorial Day.

If you have already applied, we encourage you to check on the status of your applications frequently. Remember the EIDL is directly through the SBA (Small Business Administration, sba.gov) while the PPP is an application through a SBA Bank.

From what we have heard from our small business owner partners is that the EIDL is taking between 10-15 business days for an application response from the SBA. Most partners have received $1K per employee as a free Emergency Grant.

Our small business partners have notified us that they have received either loans or feedback on their PPP applications between 5-10 business days. Patience is key.

Review this helpful article on how PPP loan forgiveness will work. Click here.

Here is information on each program :

Paycheck Protection Plan (Two Term Loan)

  • Available through SBA Banks (with relaxed underwriting standards) always try your personal/business bank first or a community bank)
  • No borrower fees
  • No collateral or personal guarantee requirements
  • Available to sole propietors (use your tax documents and 1099s)
  • No credit elsewhere test
  • The lender will look at all 2019 payroll costs and it seems like they will multiply it by 2.5 for your max loan. (Or they may just take an average monthly payroll costs of 2019. It may depend on how long you’ve been in business)
  • Covered loan period for loan forgiveness from Feb 15 – June 30th 2020 for specific loan uses
    1. Loan uses: Payroll support, paid or medical leave, insurance premiums, debt oblications, rent and mortgage, utilities
  • Loan deferment payments between 6-12 months

We have a quick demo of the Paycheck Protection Plan (PPP) application to share how easy it is to apply here.

Economic Injury Disaster Loan (EIDL)

  • An Emergency Grant component
  • Personal loan guarantee waived for advances below $200K
  • 1 year in business waived
  • Apply at sba.gov
  • Credit elsewhere test waived
  • SBA can approve based on credit score
  • Apparently up to 3.75% interest rate, 10-year term; amount given and term are determined by SBA based on your app; no loan forgiveness

SBA Express Bridge Loan

  • This is if your business already has an SBA loan
  • Increases access to capital up to $25K with less paperwork
  • Possible payment deferments

We believe businesses can apply for both the EIDL and the Paycheck Protection Plan if they are used for separate purposes, in addition to any State and or City relief program. Make sure to check out our State, City and other resources post for other relief efforts.

Image by Artist and Illustrator, Robert Neubecker.