COMPARISON OF SMALL BUSINESS
ADMINISTRATION STIMULUS (DRAFT VERSION) |
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FOR SMALL BUSINESSES |
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Program Name: |
SBA 7(a) Relief Loans (Paycheck
Protection Program) |
SBA 7(b) Economic Injury Disaster
Loans (EIDL) |
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Requirements for Borrowing: |
- operational on 2/15/20 |
All small businesses in all of US
States and territories are currently eligible |
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- had employees or subcontractors |
to apply for low-interest loans due
to COVID-19 |
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- not more than 500 employees per
location |
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- impacted by restrictions related
to COVID-19 |
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- no personal guarantees |
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- no collateral |
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Max Amount of Loan: |
Lesser of $10 million or business's
average total monthly payroll |
$2 Million |
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costs which include salaries,
insurance premiums, retirement benefits and state |
Maximum amount of loan is
determined on a case by case basis; 2 Million is not guaranteed. |
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and local employment tax but does
not include compensation |
Applicant must be able to certify a
lack of working capital by showing a |
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of employees that make in excess of
$100k annually as prorated for the period.
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balance sheet and operating
statement pre and post disaster. |
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Sum is divided by 12 to arrive at
average monthly and then multiplied by 2.5. |
The economic injury does not equal
the amount of loan. The SBA will
determine the |
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reasonableness of the request. |
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Loan Forgiveness: |
Borrowers will be eligible to apply
for loan forgiveness equal to the amount |
None |
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spent during the 8
week period after the loan closing date on payroll costs, interest |
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on mortgages, payments of rent and
utility payments in each case that were in |
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place prior to 2/15/20. Amount
forgiven is reduced proportionally by any reduction |
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in employees retained compared to
previous year and by the reduction in pay of |
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any employee beyond 25% of the
prior year's compensation. Employees
with |
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annualized salary in excess of
$100k are not considered in this calculation. |
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Borrowers who re-hire workers
previously laid-off from 2/15 through 4/1 shall not |
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have those numbers count against
them for forgiveness purposes so long as they |
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are re-hired by 6/30. Cancelled debt shall not be included in the
borrower's |
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taxable income for this year. |
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Borrowers must request loan
forgiveness from their lender by submitting required |
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documentation supporting the key
expenditures. |
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Repayment Terms: |
Payments of principal, interest and
fees will be deferred for at least 6 months on |
Repayment terms are determined on a
case by case basis. |
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any amounts not forgiven. Interest rate is capped at 4% with loan
repayment |
Interest rate is 3.75% payable over
30 years. |
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over 10 years. |
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No pre-payment fees. |
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How to Apply: |
Through an approved 7(a) lender,
start with your own banker to inquire if |
Through SBA website |
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they have an affiliated banking
institution that processes 7(a) loans.
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