There has been a lot of misconception and misleading information regarding the SBA loan provisions funded by the CARES ACT. Primarily by those who are looking to take advantage of the desperation of other people during these hard times. So, let's clear the air shall we?
What is the PPP Loan?
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive the loan if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 60% of the forgiven amount must have been used for payroll).
Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years. All loans have an interest rate of 1%.
For more info on the PPP Loan contat the lender you went through to apply for the loan, or the SBA website for the FAQ's.
What is EIDL? - Economic Injury Disaster Loan Emergency Advance
This advance is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. This loan advance of up to $10,000 will not have to be repaid. Recipients do not have to be approved for a loan in order to receive the advance, but the amount of the loan advance will be deducted from total loan eligibility. Small businesses, Small Agriculural Businesses, Non-Profifits (including faith based organizations), may apply. Info for non-profits accepting the loans can be found on the SBA website FAQ's.
Who can't Apply?
A business is ineligible due to an owner’s criminal history only if an owner of 20 percent or more of the equity of the applicant:
• is presently incarcerated or, for any felony, is presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of, pleaded guilty or nolo contendere to, or commenced any form of parole or probation (including probation before judgment) for, a felony involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance within the last five years or any other felony within the last year.
What is SBA Express Bridge Loans? Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. 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 an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
For more information, read through the SBA website or call the customer service for more details.
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