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For small business, one of the more important parts of federal coronavirus relief is the enhancement of the SBA 7(a) loan program, particularly the introduction of the Paycheck Protection Program. The Paycheck Protection Program gives the SBA the ability to guarantee hundreds of billions in loans to small businesses via a national network of banks. The Paycheck program provides a forgivable loan for eight or twenty-four weeks of cash-flow assistance to small businesses. Borrowers can also apply for an emergency grants to meet immediate needs, as well as for an Express Loan.
There have been two different times PPP loans have been made available to small businesses. The first was under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March of 2020. The second was with the Emergency Coronavirus Relief Act of 2020 (ECRA). A detailed comparison of the CARES Act and ECRA coronavirus relief loans, details on how to apply, articles and FAQs are below.
For information on State and Local coronavirus relief programs, please see this page.
How to Apply
StandardClick Here Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for PPP1
ECRA(Dec. 2020)Click Here to Learn How to Apply for PPP2
Who is Eligible
Standardâ—â¶Ä‚Q³Ü²¹±ô¾±´Ú¾±±ð»å â—â¶Ä‚For profit businesses onlyâ—â¶Ä‚Engaged in, or propose to do business in, the U.S. or its territoriesâ—â¶Ä‚Owner equity to investedâ—â¶Ä‚Used alternative financial resources, including personal assets, before seeking financial assistanceâ—â¶Ä‚Not on the excluded business list
CARES Act (Mar. 2020)â—â¶Ä‚Operating on February 15, 2020â—â¶Ä‚Any business, nonprofit, veterans group, or tribal business with 500 or fewer employees includingâ—â¶Ä‚Sole proprietorsâ—â¶Ä‚Independent contractorsâ—â¶Ä‚Eligible self-employed workersâ—â¶Ä‚Hotel and food service chains and franchisees with 500 or fewer employees per location
ECRA(Dec. 2020)â—â¶Ä‚Operating on February 15, 2020â—â¶Ä‚Any business, nonprofit, veterans group, or tribal business with 300 or fewer employees (or alternative SBA size standard per industry)â—â¶Ä‚25% reduction of gross receipts in any one quarter in 2020 as compared to that same quarter in 2019
Allowed uses
Standardâ—â¶Ä‚Acquire landâ—â¶Ä‚Purchase a buildingâ—â¶Ä‚Convert, expand or renovate buildingsâ—â¶Ä‚Acquire and install fixed assetsâ—â¶Ä‚Acquire inventoryâ—â¶Ä‚Purchase supplies and raw materialsâ—â¶Ä‚Purchase a businessâ—â¶Ä‚Start a businessâ—â¶Ä‚Leasehold improvementsâ—â¶Ä‚Term working capitalâ—â¶Ä‚Refinance certain debts
CARES Act (Mar. 2020)In addition to normal uses:â—â¶Ä‚Payroll costs, including payments for vacation, parental, family, medical or sick leave; severance payments; payments required for group health care benefits (including insurance premiums), retirement benefits, and state and local employment taxesâ—â¶Ä‚Interest payments on any mortgage obligations or other debt obligations incurred before February 15, 2020 (but not any payments or prepayments of principal) â—â¶Ä‚Rent paymentsâ—â¶Ä‚U³Ù¾±±ô¾±³Ù¾±±ð²õâ—â¶Ä‚Salaries, but cannot be used for compensation of individual employees, independent contractors, or sole proprietors in excess of an annual salary of $100,000; compensation of employees with a principal place of residence outside the United States; or leave wages already covered by the Families First Coronavirus Response Actâ—â¶Ä‚Other debt obligations
ECRA(Dec. 2020)In addition to normal uses:â—â¶Ä‚Payroll costs, including payments for vacation, parental, family, medical or sick leave; severance payments; payments required for group health care benefits (including insurance premiums), retirement benefits, and state and local employment taxesâ—â¶Ä‚Interest payments on any mortgage obligations or other debt obligations incurred before February 15, 2020 (but not any payments or prepayments of principal) â—â¶Ä‚Rent paymentsâ—â¶Ä‚U³Ù¾±±ô¾±³Ù¾±±ð²õâ—â¶Ä‚Salaries, but cannot be used for compensation of individual employees, independent contractors, or sole proprietors in excess of an annual salary of $100,000; compensation of employees with a principal place of residence outside the United States; or leave wages already covered by the Families First Coronavirus Response Actâ—â¶Ä‚Other debt obligationsâ—â¶Ä‚Additional covered expenses including operating costs; supplier costs; property damage costs; and worker protection costs
Maximum Loan
Standard$5M
CARES Act (Mar. 2020)Lesser of: average fixed payroll costs X 2.5 timesor $10M max
ECRA(Dec. 2020)Lesser of: average fixed payroll costs X 2.5 timesor $2M max; X 3.5 times payroll for NAICS 72 restaurant, lodging, food services businesses
Interest Rate
StandardVariable: Prime + 2.25% to 4.75% depending on amount and term of loanFixed: 5% to 8%
CARES Act (Mar. 2020)1%
ECRA(Dec. 2020)1%
Term
Standard25 years for real estate
10 years for equipment
10 years of working working capital or inventory loan
CARES Act (Mar. 2020)5 years
ECRA(Dec. 2020)5 years
Fees
Standard2% - 3% of loan
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Prepayment Penalties
StandardFor certain terms loans 15 years or more
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Collateral
StandardNone up to $25K. For loans exceeding $350K, SBA requires maximum collateral up to principal amount
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Payment deferment
StandardN/A
CARES Act (Mar. 2020)When SBA remits loan forgiveness amount to bank if borrower applies for forgiveness within 10 months after end of loan period; or 10 months from end of covered period if no forgiveness applied for
ECRA(Dec. 2020)When SBA remits loan forgiveness amount to bank if borrower applies for forgiveness within 10 months after end of loan period; or 10 months from end of covered period if no forgiveness applied for
Loan forgiveness
StandardN/A
CARES Act (Mar. 2020)Forgiveness for 8 or 24 weeks (borrower's choice) from date of loan origination for:â—â¶Ä‚Payroll costsâ—â¶Ä‚Mortgage interest paymentsâ—â¶Ä‚Rent paymentsâ—â¶Ä‚Utility paymentsNOTE: Forgiveness contingent on keeping employees at 60% or greater of prior wages, or proportional reduction
ECRA(Dec. 2020)Forgiveness for 8 or 24 weeks (borrower's choice) from date of loan origination for:â—â¶Ä‚Payroll costsâ—â¶Ä‚Mortgage interest paymentsâ—â¶Ä‚Rent paymentsâ—â¶Ä‚Utility paymentsâ—â¶Ä‚Other covered operating costs; supplier costs; property damage costs; and worker protection costs NOTE: Forgiveness contingent on keeping employees at 60% or greater of prior wages, or proportional reduction
Funding source
StandardSBA matches Lender
CARES Act (Mar. 2020)SBA matches Lender and pays Borrower's Interest and principal if deferred
ECRA(Dec. 2020)SBA matches Lender and pays Borrower's Interest and principal if deferred
SBA guarantee to lender
Standard85% < $150K > 75%
CARES Act (Mar. 2020)100%
ECRA(Dec. 2020)100%
How to Apply
StandardClick Here Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for PPP1
ECRA(Dec. 2020)Click Here to Learn How to Apply for PPP2
Who is Eligible
Standardâ—â¶Ä‚Q³Ü²¹±ô¾±´Ú¾±±ð»å â—â¶Ä‚For profit businesses onlyâ—â¶Ä‚Engaged in, or propose to do business in, the U.S. or its territoriesâ—â¶Ä‚Owner equity to investedâ—â¶Ä‚Used alternative financial resources, including personal assets, before seeking financial assistanceâ—â¶Ä‚Not on the excluded business list
CARES Act (Mar. 2020)â—â¶Ä‚Operating on February 15, 2020â—â¶Ä‚Any business, nonprofit, veterans group, or tribal business with 500 or fewer employees includingâ—â¶Ä‚Sole proprietorsâ—â¶Ä‚Independent contractorsâ—â¶Ä‚Eligible self-employed workersâ—â¶Ä‚Hotel and food service chains and franchisees with 500 or fewer employees per location
ECRA(Dec. 2020)â—â¶Ä‚Operating on February 15, 2020â—â¶Ä‚Any business, nonprofit, veterans group, or tribal business with 300 or fewer employees (or alternative SBA size standard per industry)â—â¶Ä‚25% reduction of gross receipts in any one quarter in 2020 as compared to that same quarter in 2019
Allowed uses
Standardâ—â¶Ä‚Acquire landâ—â¶Ä‚Purchase a buildingâ—â¶Ä‚Convert, expand or renovate buildingsâ—â¶Ä‚Acquire and install fixed assetsâ—â¶Ä‚Acquire inventoryâ—â¶Ä‚Purchase supplies and raw materialsâ—â¶Ä‚Purchase a businessâ—â¶Ä‚Start a businessâ—â¶Ä‚Leasehold improvementsâ—â¶Ä‚Term working capitalâ—â¶Ä‚Refinance certain debts
CARES Act (Mar. 2020)In addition to normal uses:â—â¶Ä‚Payroll costs, including payments for vacation, parental, family, medical or sick leave; severance payments; payments required for group health care benefits (including insurance premiums), retirement benefits, and state and local employment taxesâ—â¶Ä‚Interest payments on any mortgage obligations or other debt obligations incurred before February 15, 2020 (but not any payments or prepayments of principal) â—â¶Ä‚Rent paymentsâ—â¶Ä‚U³Ù¾±±ô¾±³Ù¾±±ð²õâ—â¶Ä‚Salaries, but cannot be used for compensation of individual employees, independent contractors, or sole proprietors in excess of an annual salary of $100,000; compensation of employees with a principal place of residence outside the United States; or leave wages already covered by the Families First Coronavirus Response Actâ—â¶Ä‚Other debt obligations
ECRA(Dec. 2020)In addition to normal uses:â—â¶Ä‚Payroll costs, including payments for vacation, parental, family, medical or sick leave; severance payments; payments required for group health care benefits (including insurance premiums), retirement benefits, and state and local employment taxesâ—â¶Ä‚Interest payments on any mortgage obligations or other debt obligations incurred before February 15, 2020 (but not any payments or prepayments of principal) â—â¶Ä‚Rent paymentsâ—â¶Ä‚U³Ù¾±±ô¾±³Ù¾±±ð²õâ—â¶Ä‚Salaries, but cannot be used for compensation of individual employees, independent contractors, or sole proprietors in excess of an annual salary of $100,000; compensation of employees with a principal place of residence outside the United States; or leave wages already covered by the Families First Coronavirus Response Actâ—â¶Ä‚Other debt obligationsâ—â¶Ä‚Additional covered expenses including operating costs; supplier costs; property damage costs; and worker protection costs
Maximum Loan
Standard$5M
CARES Act (Mar. 2020)Lesser of: average fixed payroll costs X 2.5 timesor $10M max
ECRA(Dec. 2020)Lesser of: average fixed payroll costs X 2.5 timesor $2M max; X 3.5 times payroll for NAICS 72 restaurant, lodging, food services businesses
Interest Rate
StandardVariable: Prime + 2.25% to 4.75% depending on amount and term of loanFixed: 5% to 8%
CARES Act (Mar. 2020)1%
ECRA(Dec. 2020)1%
Term
Standard25 years for real estate
10 years for equipment
10 years of working working capital or inventory loan
CARES Act (Mar. 2020)5 years
ECRA(Dec. 2020)5 years
Fees
Standard2% - 3% of loan
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Prepayment Penalties
StandardFor certain terms loans 15 years or more
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Collateral
StandardNone up to $25K. For loans exceeding $350K, SBA requires maximum collateral up to principal amount
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Waived
Payment deferment
StandardN/A
CARES Act (Mar. 2020)When SBA remits loan forgiveness amount to bank if borrower applies for forgiveness within 10 months after end of loan period; or 10 months from end of covered period if no forgiveness applied for
ECRA(Dec. 2020)When SBA remits loan forgiveness amount to bank if borrower applies for forgiveness within 10 months after end of loan period; or 10 months from end of covered period if no forgiveness applied for
Loan forgiveness
StandardN/A
CARES Act (Mar. 2020)Forgiveness for 8 or 24 weeks (borrower's choice) from date of loan origination for:â—â¶Ä‚Payroll costsâ—â¶Ä‚Mortgage interest paymentsâ—â¶Ä‚Rent paymentsâ—â¶Ä‚Utility paymentsNOTE: Forgiveness contingent on keeping employees at 60% or greater of prior wages, or proportional reduction
ECRA(Dec. 2020)Forgiveness for 8 or 24 weeks (borrower's choice) from date of loan origination for:â—â¶Ä‚Payroll costsâ—â¶Ä‚Mortgage interest paymentsâ—â¶Ä‚Rent paymentsâ—â¶Ä‚Utility paymentsâ—â¶Ä‚Other covered operating costs; supplier costs; property damage costs; and worker protection costs NOTE: Forgiveness contingent on keeping employees at 60% or greater of prior wages, or proportional reduction
Funding source
StandardSBA matches Lender
CARES Act (Mar. 2020)SBA matches Lender and pays Borrower's Interest and principal if deferred
ECRA(Dec. 2020)SBA matches Lender and pays Borrower's Interest and principal if deferred
SBA guarantee to lender
Standard85% < $150K > 75%
CARES Act (Mar. 2020)100%
ECRA(Dec. 2020)100%
How to Apply
StandardClick Here to Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for a Disaster Loan
ECRA(Dec. 2020)Same, but now targeted toward low income borrowers
Allowed Uses
StandardWorking capital for ordinary and necessary operating expenses
CARES Act (Mar. 2020)Working capital for ordinary and necessary operating expenses
ECRA(Dec. 2020)Same
Maximum Loan
Standard$2M
CARES Act (Mar. 2020)$2M
ECRA(Dec. 2020)Same
Interest Rate
StandardUp to 4%
CARES Act (Mar. 2020)Businesses 3.75%Nonprofits 2.75%
ECRA(Dec. 2020)Same
Term
Standard30 years maximum
CARES Act (Mar. 2020)30 years maximum
ECRA(Dec. 2020)Same
Turn Around Time
Standard2 to 3 weeks or longer
CARES Act (Mar. 2020)Same day
ECRA(Dec. 2020)Same
Collateral
StandardNone up to $25K.
For loans exceeding $350K, SBA requires maximum collateral up to principal amount
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Same
SBA EIDL Grant
StandardNone
CARES Act (Mar. 2020)Up to $10K ($1K per employee) dispersed within three days for â—â¶Ä‚Startupsâ—â¶Ä‚Cooperatives and â—â¶Ä‚ESOPs with fewer than 500 employees, and â—â¶Ä‚Any individual operating as a sole proprietor or an independent contractor
ECRA(Dec. 2020)Same
How to Apply
StandardClick Here to Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for a Disaster Loan
ECRA(Dec. 2020)Same, but now targeted toward low income borrowers
Allowed Uses
StandardWorking capital for ordinary and necessary operating expenses
CARES Act (Mar. 2020)Working capital for ordinary and necessary operating expenses
ECRA(Dec. 2020)Same
Maximum Loan
Standard$2M
CARES Act (Mar. 2020)$2M
ECRA(Dec. 2020)Same
Interest Rate
StandardUp to 4%
CARES Act (Mar. 2020)Businesses 3.75%Nonprofits 2.75%
ECRA(Dec. 2020)Same
Term
Standard30 years maximum
CARES Act (Mar. 2020)30 years maximum
ECRA(Dec. 2020)Same
Turn Around Time
Standard2 to 3 weeks or longer
CARES Act (Mar. 2020)Same day
ECRA(Dec. 2020)Same
Collateral
StandardNone up to $25K.
For loans exceeding $350K, SBA requires maximum collateral up to principal amount
CARES Act (Mar. 2020)Waived
ECRA(Dec. 2020)Same
SBA EIDL Grant
StandardNone
CARES Act (Mar. 2020)Up to $10K ($1K per employee) dispersed within three days for â—â¶Ä‚Startupsâ—â¶Ä‚Cooperatives and â—â¶Ä‚ESOPs with fewer than 500 employees, and â—â¶Ä‚Any individual operating as a sole proprietor or an independent contractor
ECRA(Dec. 2020)Same
How to Apply
StandardClick Here to Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for an Express Loan
ECRA(Dec. 2020)Same
Maximum Loan
Standard$350K
CARES Act (Mar. 2020)$1M until December, then $500K
ECRA(Dec. 2020)
Allowed Uses
Standardâ—â¶Ä‚Long-term working capitalAccounts payable, purchasing inventory, and other operational expenses â—â¶Ä‚Providing short-term working capitalâ—â¶Ä‚Seasonal financing, contract performance, construction financing, and/or exportâ—â¶Ä‚Purchasing real estatePurchasing equipment, furniture, machinery, supplies, and materialsâ—â¶Ä‚Covering construction and/or renovation costsâ—â¶Ä‚Establishing or acquiring a new business, or expanding an existing businessâ—â¶Ä‚Refinancing existing business debt (so long as the lender and ultimately the SBA are not in a position to sustain a loss through refinancing)
CARES Act (Mar. 2020)â—â¶Ä‚Operating capital
ECRA(Dec. 2020)
Term
Standard7 years maximum
CARES Act (Mar. 2020)7 years maximum
ECRA(Dec. 2020)Same
Turn Around Time
Standard36 hours
CARES Act (Mar. 2020)36 hours
ECRA(Dec. 2020)Same
Collateral
StandardNone up to $25KLender discretion up to $350K maximum
CARES Act (Mar. 2020)None up to $25K. Lender discretion up to $350K maximum
ECRA(Dec. 2020)Same
How to Apply
StandardClick Here to Learn How to Apply
CARES Act (Mar. 2020)Click Here to Learn How to Apply for an Express Loan
ECRA(Dec. 2020)Same
Maximum Loan
Standard$350K
CARES Act (Mar. 2020)$1M until December, then $500K
ECRA(Dec. 2020)
Allowed Uses
Standardâ—â¶Ä‚Long-term working capitalAccounts payable, purchasing inventory, and other operational expenses â—â¶Ä‚Providing short-term working capitalâ—â¶Ä‚Seasonal financing, contract performance, construction financing, and/or exportâ—â¶Ä‚Purchasing real estatePurchasing equipment, furniture, machinery, supplies, and materialsâ—â¶Ä‚Covering construction and/or renovation costsâ—â¶Ä‚Establishing or acquiring a new business, or expanding an existing businessâ—â¶Ä‚Refinancing existing business debt (so long as the lender and ultimately the SBA are not in a position to sustain a loss through refinancing)
CARES Act (Mar. 2020)â—â¶Ä‚Operating capital
ECRA(Dec. 2020)
Term
Standard7 years maximum
CARES Act (Mar. 2020)7 years maximum
ECRA(Dec. 2020)Same
Turn Around Time
Standard36 hours
CARES Act (Mar. 2020)36 hours
ECRA(Dec. 2020)Same
Collateral
StandardNone up to $25KLender discretion up to $350K maximum
CARES Act (Mar. 2020)None up to $25K. Lender discretion up to $350K maximum
ECRA(Dec. 2020)Same
Emergency Relief °®ÁÄÊÓƵ
â—â¶Ä‚Cash Flow Analysisâ—â¶Ä‚Tax Planningâ—â¶Ä‚Tax Extension Preparationâ—â¶Ä‚Tax Appeals and Tax Resolutionâ—â¶Ä‚State and Local Tax Reliefâ—â¶Ä‚Special Deductions and Creditsâ—â¶Ä‚S Corps and Partnership Budgetingâ—â¶Ä‚C Corp Budgetingâ—â¶Ä‚Sales and Use Tax Reliefâ—â¶Ä‚SBA Loan Consulting
Here’s what you will need to apply for a CARES Act SBA loan or grant
We are guided by efficient work with clients. Here’s what you will need to apply for an SBA Paycheck Protection Program Loan:
We are guided by efficient work with clients. Here’s what you will need to apply for an SBA Economic Injury Disaster Loan unless the SBA or your lender decides to accept an expedited application:
We are guided by efficient work with clients. Here’s what you will need to apply for an SBA Express Loan unless the SBA or your lender decides to accept an expedited application:
Related Blogs
Understanding SBA Disaster Loans And What They Mean For You
Are you a small business owner struggling financially due to the COVID-19 outbreak? The SBA is offering Economic Injury Disaster Loans of up to $2 million.
SBA Disaster Loans During The Coronavirus Outbreak
The U.S. Small Business Administration (SBA) has never faced a challenge like the COVID-19 outbreak. °®ÁÄÊÓƵ has the latest on SBA disaster loans.
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