The year 2020 is tough for many people, especially small business owners. During this period of time, if you were one of them, what can you do to make it through?
If you are looking for financial help, a loan from the Small Business Administration, the SBA, is probably the best solution for you.
The SBA doesn’t lend money directly to entrepreneurs. Instead, it cooperated with many lending partners and sets guidelines for loans. By doing so, the SBA can effectively reduce the risk for lenders and makes it easier for them to access capitals.
There are several loan programs provided by the SBA.
SBA Paycheck Protection Program (PPP)
According to the CARES Act on March 27, 2020, the Paycheck Protection Program provides forgivable SBA emergency loans of up to $10 million to small businesses affected by COVID-19.
As stipulated in the PPP Flexibility Act of 2020, your loan will now be partially or fully forgiven. What’s more, your loan will be deferred until the SBA remits the forgiven amount to your lender. If you don’t ask for forgiveness, the payments are deferred for 10 months from the end of the covered period.
SBA Economic Injury Disaster Loan (EIDL)
As a response to COVID-19, the SBA provides EIDL to help businesses recover. This loan is up to $2 million with maximum terms of 30 years. The interest rate is 3.75%. Business owners can use the capital to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of COVID-19.
SBA Express Bridge Loan (EBL)
If you currently have a business relationship with an SBA Express Lender, the EBL allows you have access to up to $25,000 quickly. EBL helps bridge the gap during the time you are applying for SBA Economic Injury Disaster Loan (EIDL).