The Coronavirus Small Business Loan Program: What You Need To Know

Andrew Cummings
April 3, 2020

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by congress last week, there should be some relief coming for small businesses.

Congress has appropriated $349 billion toward this program.

On March 25, the SBA expanded the Express Bridge Loan Pilot Program eligibility to include small businesses nationwide that have been adversely impacted by the coronavirus pandemic.

Contact your bank and ask if they are an SBA 7 (a) lender. "We can turn this money and get it into small business hands as quickly as we can".

Notably, these loans do not require personal guarantees or collateral, which administration officials are hoping will make for a speedy approval process. Nonprofits, including churches and religious ministries, are eligible to receive funds covering up to 2.5 times their average monthly payroll, with a cap of $10 million per loan.

The new loan program will be available retroactive from February 15, so employers can rehire their recently laid-off employees through June 30. "That's why we are working to make it as easy as possible for even the smallest businesses to apply for additional funding with the launch of the Michigan Paycheck Protection Program website".

The Paycheck Protection Program is for any business with fewer than 500 employees, including sole proprietorships, independent contractors and self-employed workers affected by the coronavirus.

Starting April 10th, independent contractors and self-employed individuals can apply.

Under the provisions in the CARES Act, employers can use the money from the 7 (a) loan to pay for payroll and benefit expenses, as well as mortgage/rental payments or utility expenses.

It's worth noting too that given that community banks are the ones stepping up to help small businesses-and that they're doing it at such a rapid pace on the first day of the program-that this counters the narrative from some on the left and in establishment media that somehow the efforts of Trump, Treasury Secretary Steven Mnuchin, and the broader administration were created to only help big corporate cronies.

Sharon King, Executive Director of the Boulder Small Business Development Center, will lead the discussion.

So lenders were initially concerned that the rapid rollout of the loans, which the administration promised would be issued within days, could lead to fraud and money laundering.

"We are communicating directly with our customers to provide details about the loan program and how to apply", the company said in a statement.

Treasury Secretary Steven Mnuchin took to Twitter Friday morning to tout the opening of the program, saying "community banks had already processed over 700 loans for $2,500,000".

"Community bank lenders can not "break even" with such a low rate of interest and for many it will not be economic or feasible to participate in the program", wrote ICBA CEO and President Rebeca Romero Rainey.

In the interim, Jonathan Whitehead, an attorney specializing in First Amendment law, said he has advised churches seeking his counsel to "wait and see" what the SBA guidance says for churches before applying for a loan under the program.

At a Thursday White House press briefing, Mnuchin said the interest rates would now be set at 1%, citing some small banks' concerns. However, if a business lays off employees in the first eight weeks, the amount forgiven will be reduced, Inc. reported. Chipol spoke about what all Loan packages small businesses should be looking at.

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