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COVID-19 Relief Options for Small Business Owners Answered

We are now living in scary, uncertain times—Covid-19 has wreaked havoc on not only our nation’s health, but also our businesses.

As a mortgage broker, you will want to make sure you’re adequately equipped to answer your client’s questions during this difficult time. Whether borrowers are seeking financial assistance or more information on the different programs to ease their burden, there’s relief to be had and you can point them in the right direction.

In response to the pandemic, the Small Business Administration (SBA) has enacted multiple measures for those small business owners seeking relief. You can visit the SBA COVID-19 Resource page for more information on the different solutions currently in place, including the Paycheck Protection Program and Economic Injury Disaster Loans.

Although we are not an SBA-approved lender and do not offer SBA funding programs, we will be providing support and resources that will help you and your client. After all, you probably have a small business yourself, so we want to help you all as we face this pandemic together.

Below we highlight our SBA Frequently Asked Questions:

What is the CARES Act?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a disaster response bill that was signed into law on March 27th, 2020. With $2.2 trillion allocated to support individuals and businesses impacted by the COVID-19 pandemic, the CARES Act is the largest economic stimulus bill in U.S. history.

A portion of this bill is being used to assist small business owners currently facing economic hardship.

COVID-19 is severely impacting my business. What relief options are available?

The Small Business Administration has several programs in place to help you. Some of these are standard SBA programs and others were recently created to provide relief for business owners who are affected by the COVID-19 pandemic.

Two of the most prominent new solutions are the Paycheck Protection Program and the Economic Injury Disaster Loan Advance. You can visit the SBA Coronavirus Relief Options page for more information regarding eligibility and qualification.

Does my business qualify for SBA relief?

The following groups are generally eligible for these SBA programs:

  • Small businesses with less than 500 employees
  • Sole proprietorships
  • Independent contractors
  • Self-employed individuals
  • 501(c)(3) non-profit organizations
  • 501 (c) (19) veterans’ organizations
  • Tribal businesses

See the SBA Coronavirus Relief Options page for information on other entities that may be eligible.

Which types of lenders are able to offer these loans?

You must partner with a SBA-approved lender to secure relief funding. See the full list of approved financial institutions here.

 

Paycheck Protection Program FAQs

What is the Paycheck Protection Program (PPP)?

The Small Business Administration’s Paycheck Protection Program (PPP) is designed to help small business owners keep their employees on payroll during the COVID-19 pandemic.

According to the SBA, the administration “will forgive loans if all employees are kept on the payroll for 8 weeks and the money is used for payroll, rent, mortgage interest, or utilities.”  However, not more than 25 percent of the loan forgiveness amount may be attributable to nonpayroll costs.

Who can qualify for the Paycheck Protection Program?

Some of the entities that may be eligible are:

  • Small businesses with fewer than 500 employees
  • Sole proprietors, independent contractors, and self-employed individuals
  • Non-profit organizations
  • Veterans’ organizations
  • Tribal businesses

See the Paycheck Protection Program page for specific eligibility requirements.

What are the general loan terms for the Paycheck Protection Program?

  • Loan Amount: 5x business’s avg. monthly payroll up to $10 million
  • Interest Rate: Fixed 1.00%
  • Loan Term: Loan maturity of 2 years
  • Guarantee: No guarantee required
  • Loan Forgiveness: Up to 100%

Is it true that my loan can be forgiven?

Yes, but you must meet certain conditions for 100% loan forgiveness. You can learn more by visiting the SBA online resource.

How can I apply for Paycheck Protection Program funding?

Small business owners must apply through a SBA-approved institution.

 

Economic Injury Disaster Loan Advance FAQs

What is the Economic Injury Disaster Loan (EIDL) Emergency Advance?

This loan advance from Small Business Administration provides up to $10,000 of economic relief to small businesses that are temporarily experiencing a loss of revenue due to the COVID-19 pandemic.

This advance will be considered an Emergency EIDL grant and can be used for the following purposes:

  • Payroll
  • Rent
  • Mortgage payments
  • Other obligations that cannot be met due to a lack of revenue

When will I receive this advance?

Funds will be available within 3 days of a successful application.

How can I apply?

Business owners can visit www.covid19relief.sba.gov to apply for an EIDL Emergency Advance.