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SBA’s Disaster Declaration Makes Loans Available Due to COVID-19 (SBA file date: 4-8-20)

Summary

A Small Business Administration slide presentation from the Massachusetts District Office outlines SBA disaster assistance after its COVID-19 disaster declaration, effective March 18th, and the CARES Act, effective March 27th. It describes the Paycheck Protection Program as a $350 billion loan program for employers with 500 employees or fewer, self-employed and gig workers and certain nonprofits, with loans of 250% of average monthly payroll up to $10 million, a 6-month payment deferment, and availability through June 30, 2020. The deck says SBA will cover six months of payments on existing 7(a), 504 and microloans. Economic Injury Disaster Loans of up to $2 million carry rates of 3.75% for small businesses and 2.75% for nonprofits, with terms of up to 30 years. It closes with SCORE, MSBDC and Center for Women & Enterprise contacts in Massachusetts.

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D i s a s t e r As s i s t a n c e F o r S m a l l B u s i n e s s
                                SBA’s Disaster Declaration
                                Makes Loans Available
                                Due to COVID-19 effective
                                March 18th

                                President Trump Signed
                                CARES Act effective
                                March 27th


Administrator Jovita Carranza
                 SBA’s Assistance for Small Business




Counseling >>>>>       Capital >>>>>                       Contracting >>>>>               Disaster Assistance
Business Training &    Access to Government                Selling to the U.S.
Education              Guaranties                          Government
 SCORE, MSBDC & CWE    Microloans/Community Advantage     8(a) Business Development &    Physical Damage & Economic
                        7(a)/Express, 504 Loan Programs     HUBZone Certification           Injury Loans
                        Surety Bond Guaranty Program
           SBA’s Disaster Assistance for Small Business




Paycheck Protection Program   Small Business Debt Relief   Economic Injury Disaster Loans & Grants
Paycheck Protection Program
The Paycheck Protection Program is a $350 billion loan program that applies to:
 Small employers with 500 employees or fewer, as well as those that meet the current Small
  Business Administration (SBA) size standards
 Self-employed individuals and “gig economy” individuals; and
 Certain nonprofits, including 501(c)(3) organizations and 501(c)(19) veteran organizations, and
  tribal business concerns with under 500 employees.


Loan amount:
 The size of the loans equal 250% of an employer’s average monthly payroll, up to a maximum
  loan amount of $10 million.


Use of funds:
 Covered payroll costs include salary, wages, and payment of cash tips (up to an annual rate of
  pay of $100,000); employee group health care benefits, including insurance premiums;
  retirement contributions; and covered leave.
 Loans can also be used to pay interest payments on mortgage obligations, rent, utilities, and
  interest on other debt obligations previously incurred.
Paycheck Protection Program
Reduced costs:
The cost of participation in the program is reduced for both borrowers and lenders by providing fee
waivers, an automatic deferment of payments for 6 months, and no prepayment penalties.


Availability:
Loans are to be made available through more than existing SBA-certified lenders, including banks,
credit unions, and other financial institutions, and SBA would be required to streamline the process
to bring additional lenders into the program.




How to Apply:
You apply through any existing SBA 7(a) lender or through any federally insured depository
institution, federally insured credit union, and Farm Credit System institution that is participating.
Other regulated lenders will be available to make these loans once they are approved and
enrolled in the program. Consult with the SBA resource partner network, your accountant, adviser
or banker to prepare your application. The Paycheck Protection Program will be available through
June 30, 2020.
Small Business Debt
Relief
This program will provide immediate relief to small businesses with non-disaster
SBA loans, 7(a), 504, and microloans.


Under it, SBA will cover all loan payments on these SBA loans, including
principal, interest, and fees, for six months.


This relief will also be available to new borrowers who take out loans within six
months of the President signing the bill into law.
Economic Injury Disaster
Loans and Grants
On March 6, the U.S. Congress passed a COVID-19 preparedness and response
supplemental funding bill that designated COVID-19 as a disaster under the
Small Business Administration (SBA).


On March 27, Congress passed the CARES Act, waiving or relaxing several loan
eligibility requirements.
Economic Injury Disaster
Loans and Grants
How much can I borrow?
Eligible entities may qualify for loans up to $2 million.


The interest rates for this disaster are:
 3.75% for small businesses
 2.75% for nonprofit organizations


Terms of the loans are decided on a case-by-case basis and on ability to
repay, but they can have a maximum length of 30 years, and are based on a
business’ actual economic injury and financial needs.


Eligibility for these working capital loans are based on the size (must be a small
business) and type of business and its financial resources. .
How to Apply
 Applicants visit SBA’s secure website at www.sba.gov/disaster


 Completed paper applications should be mailed to:
               U.S. Small Business Administration
               Processing and Disbursement Center
               14925 Kingsport Road
               Fort Worth, TX 76155


 Disaster loan information and application forms may also be obtained by calling the SBA’s
  Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or
  by sending an email to disastercustomerservice@sba.gov.
Assistance From SBA
Partners
 Free One-on-one business consulting, via Zoom, Skype, Phone, Email
 Assistance with applying for a Disaster Loan
 Each application and every business is different
 Assistance in preparing financial statements
 Updating your Business Plan
 Get a checkup for your business




For the nearest office, visit: www.sba.gov/local-assistance
SBA’s Resource Partners:                                     Experienced Volunteers
SCORE                                                        Offering:
Contact Chapters Statewide:                                   Free and Confidential


                                                              Marketing advice
Boston                  Northeastern, MA
www.boston.score.org    www.scorenemass.org
                                                              Business plan preparation


                                                              Loan application assistance
Cape Cod                Western,MA
www.capecod.score.org   www.westernmassachusetts.score.org
                                                              Online or in person counseling



Southeastern, MA        Worcester, MA
www.sema.score.org      www.worcester.score.org
SBA’s Resource Partners:                          About
MSBDC                                             MSBDC:
                                                   Free and Confidential
Statewide Regional Offices:
                                                   Business plan and loan application assistance

Pittsfield, MA                                     Combines resources of SBA, local government, private sector and academia
                        SCHEDULE A REQUEST
                          FOR COUNSELING           Export and government contracting assistance.
Worcester, MA
                          VIRTUAL SESSION:         Typically located at colleges and universities: U-Mass Amherst and Boston,
                       Go to: www.msbdc.org/rfc     Salem State and Clark University

Salem, MA



Fall River, MA



Springfield, MA
SBA’s Resource Partners:                                 Centers in Boston and
Center for Women & Enterprise                            Westborough provide:
  www.cweonline.org                                       Classes on how to write a business plan
                           Locations:
                                                          Support in launching your business
                      CWE Eastern MA - Boston, MA
SCHEDULE A REQUEST    Info.EasternMA@CWEonline.org
  FOR COUNSELING                                          Networking with other business owners

  VIRTUAL SESSION:    CWE Central MA - Westborough, MA
                                                          2-hour topic-specific workshops
                      Info.CentralMA@CWEonline.org

 Veterans Business                                        One-on-one legal and business consulting

 Outreach Center
                      info.vboc@cweonline.org
 (VBOC)
   SUBSCRIBE
    www.sba.gov/updates



  Contact Information:
Massachusetts District Office
 10 Causeway Street, RM265
     Boston, MA 02222
       (617) 565-5590
 MassachusettsDO@sba.gov
T h a n k You !

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