The Coronavirus Aid, Relief and Economic Security (CARES) Act provides a number of financial resources to help small businesses affected by the COVID-19 pandemic. The U.S. Small Business Administration COVID-19 webpage provides a comprehensive list of the programs, some of which are highlighted below.
The Paycheck Protection Program (PPP) provides forgivable loans to small business specifically to assist them in retaining or rehiring their workforce. Lenders provide the PPP loans which are backed by SBA loan guarantees. The loan will be fully forgiven if more than 75 percent of the loan is used for payroll and health care benefits for employees, including the re-hire of employees who were recently laid off. Businesses will have to provide documentation to their lender noting how the PPP funds were used. Loan payments are deferred for six months and no interest will accrue during that time. PPP applications are now open and available online.
Economic Injury Disaster Loans (EIDL) also are available. These low-interest loans are designed to help businesses that have experienced a suspension or disruption of their operations due to COVID-19. Applications are now available online.
Under the SBA Debt Relief program, the SBA will pay the principal and interest of new 7(a) loans that were issued prior to September 7, 2020 and will continue to pay the principal, interest and fees of 7(a) loans for six months, as long as the loans are not delinquent.