Small businesses are at the core of the American economy and PESA’s membership. The PESA team is focused on gathering and sharing resources and up-to-date information specific to our members’ needs during the COVID-19.
- The resources below are for businesses affected by COVID-19 that qualify as small or:
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
- 500 employees, or
- That meets the SBA industry size standard if more than 500
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- Sole proprietors, independent contractors, and self-employed persons
SBA 7(A) PROGRAM
SBA Loans are distributed through the existing SBA’s 7(a) Program. Borrowers will need to apply through banks, credit unions and other lenders. There are 1,800 private lenders already approved to issue 7(a) loans. The U.S. Department of the Treasury will issue new regulations allowing most FDIC-insured banks to also issue 7(a) loans.
The CARES Act raises the maximum loan to $10 million with a maximum interest rate of 4%. Lenders will determine the proper amount by assessing businesses’ previous payroll expenses. Borrowers can defer payments for six months to a year.
PAYCHECK PROTECTION PROGRAM
The Paycheck Protection Program is a loan incentivizing small businesses to keep workers on the payroll. The loans are forgivable if all employees are kept for eight weeks and funds are used for payroll, rent, mortgage interest or utilities. Businesses can apply for these loans through any SBA 7(a) lender. The program, which began processing application on April 3, will run through June 30.
ECONOMIC INJURY DISASTER LOANS
Through SBA’s Economic Injury Disaster Loans, businesses are eligible for a loan advance of $10,000, which can be available within three days of application. The loan advance will not have to be repaid and business’s previous year’s financials will be used by SBA to determine the total amount of relief funds after the application is processed.
