During the COVID-19 public health emergency, some companies were forced to shut down entirely. Others just faced profit-killing restrictions and plummeting sales. Realizing small business owners needed help, governments created financial assistance programs to help people stay afloat. But what’s happening now amid relaxed restrictions and attempts to return to normalcy? We’re going to look at the current status of several SBA COVID-19 programs.
Paycheck Protection Program (PPP)
This SBA COVID-19 program is intended to allow business owners to retain their employees. Although assistance is offered in the form of a low-interest loan, many recipients can apply for and receive loan forgiveness.
Over the past year and a half, PPP has undergone significant changes. The SBA applied more eligibility restrictions. Additional funding was added, and a second wave of PPP loans was offered.
However, this program was closed as of May 31, 2021. All that remains at this time is for loan holders to apply for forgiveness.
COVID-19 EIDL
EIDL stands for “Economic Injury Disaster Loan.” This SBA-backed loan has been around for years. In fact, EIDL loans generally are available in “declared disaster areas.” So, this SBA COVID-19 program covers the entire United States because of the widespread damage caused by the disease.
COVID-19 EIDL loans are available to:
- Small businesses,
- Small agricultural cooperatives, and
- Most private nonprofit organizations.
Terms include fixed low interest, 30-year payment plans, and no pre-payment penalties or fees. The SBA requires collateral for loans over $25,000. Funds are to be used for “working capital and normal operating expenses.”
Currently, businesses with loans of $500,000 or less that were approved before April 7, 2021, might be available for a loan increase. The SBA is emailing eligible businesses.
Shuttered Venues Grant
This SBA COVID-19 relief program initially offered over $16 billion in grants to:
- “Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Museum operators
- Motion picture theater operators (including owners
- Talent representatives”
Grants varied based on when an eligible entity was in operation. Also, the SBA prioritized recipients by financial loss. For example, the SBA gave first priority to entities that lost 90% or more in gross revenue between April 2020 and December 2020. As of July 27, 2021, the SBA had awarded $7.5 billion in grants.
At this time, the program is still active.
Restaurant Revitalization Fund
At this time, applications are closed for this SBA COVID-19 relief program.
SBA Debt Relief
Many business owners already had SBA-backed loans before COVID-19 struck. Recognizing the additional burden, the SBA offered debt relief to current loan holders.
Under the CARES Act, the SBA began paying principal, interest, and fees for the following loans:
- 7(a)
- 504
- Microloans
This program does not cover previous EIDL loans and PPP loans. Also, the SBA automatically provides assistance through SBA Debt Relief. However, borrowers do not need to apply for this benefit.
Disaster home and business loan holders also received automatic deferments of principal and interest payments. The initial deferment period was extended through March 31, 2021. An additional deferment was later added through March 31, 2022.
Cross-Program Eligibility
Some business owners are eligible for multiple SBA COVID-19 programs. But accepting relief from one program might affect eligibility for others.
For more details, please refer to the SBA’s chart: “Cross-program eligibility on SBA COVID-19 relief options.”
About the Author
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.