Small Business Administration Offers Additional Economic Relief Beyond the PPP
Much has been said about the Paycheck Protection Program and its many benefits for small business owners, but did you know that the Small Business Administration (SBA) offers additional resources as well?
The SBA Express Bridge Loan enables small businesses who currently have a relationship with an SBA Express Lender to access up to $25,000 quickly.
The SBA Debt Relief program provides a financial reprieve to small businesses during the COVID-19 pandemic.
The SBA Express Bridge loan offers economic support to small business owners to help them overcome the temporary loss of revenue they are experiencing. The loan, which may be up to $25,000 loan, can be a term loan or it may be 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 a decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. The loan will need to be repaid in full or in part by proceeds from the EIDL loan.
The Express Bridge Loan program expires on Sept. 30.
What businesses are eligible?
To be eligible for an Express Bridge loan, a small business must be located, at the time of the COVID-19 pandemic and in a county that’s been declared a disaster area. The loan must be used to support the survival and/or reopening of the small business within the affected county.
As part of the SBA’s coronavirus debt relief efforts, the Administration will pay six months of principal, interest, and any associated fees that borrowers owe for 7(a), 504, and Microloans. This relief is not available for Paycheck Protection Program loans or Economic Injury Disaster loans. Borrowers do not need to apply for this assistance. It will be automatically provided as follows:
- For loans not in deferment, the SBA will begin making payments with the next payment due after the deferment period has ended, and will make six monthly payments.
- For loans currently on deferment, the SBA will make payments with the next payment due after the deferment period has ended, and will make six months payments.
- For loans made after March 27, 2020 and fully disbursed prior to Sept. 27, 2020, the SBA will begin making payments with the first payment due on the loan and will make six monthly payments.
The SBA has notified borrowers that it will pay their payments. Lenders have been instructed not to collect payments from borrowers. If a borrower’s payment was collected after March 27, 2020, lenders were instructed to inform the borrower that they have the option of having the loan payment returned by the lender or applying the loan payment to further reduce the loan balance after the SBA’s payment.
For additional terms and conditions on these loans visit the SBA website.
O’Reilly Rancilio attorneys are able to assist business owners with legal questions as a result of the COVID-19 crisis. Call 586-726-1000 or visit our website.
