The Paycheck Protection Program is scheduled to end on August 8, 2020. While Lendio will be taking applications through August 8, 2020, due to limited lender resources, we cannot guarantee we will be able to find a lender for your application in these final days.
Mar 27, 2020

What the $2 Trillion Relief Bill Means for Small Businesses

Due to the fast-changing nature of COVID-19 programs and SBA COVID-19 programs, posts may become quickly out of date. Please check our COVID-19 section for the most up-to-date information on rates, terms, and other info for PPP loans/EIDLs. 

This afternoon, the House of Representatives passed the Coronavirus Relief Bill, the CARES Act, aimed at supporting individuals and businesses through the financial hardship wrought by the spread of COVID-19.

The CARES Act now goes to President Trump’s desk where is expected to sign the bill into law. Assuming he does, here’s what small business owners can expect from the $2 trillion relief package.

Small Business Support in the CARES Act

If you don’t want to scan the full text of the bill, here’s everything you need to know about how the historic relief package will affect small business owners. 

Key Funding for Small Businesses 

Expanded Unemployment Benefits

Tax Benefits

Cash Payments for Employees (and Maybe Small Business Owners, Too)

What Can You Expect from the $350 billion Small Business Loan Program?

The Senate included important support for small businesses in the relief act with an expansion of the loan program through the US Small Business Administration, more commonly referred to as the SBA. 

What Size Businesses Qualify

The coronavirus stimulus loans will be available to businesses that have 500 or fewer employees. 

Who Will Give Out the Loans?

The loans will be administered by banks and other SBA lenders, which should work to speed up the process of applying for the coronavirus loans, getting approved, and receiving funds.

How Big Will the Loans Be?

Loans up to $10 million will be granted based on how much the company has paid its employees between January 1 and February 29. 

What Will the Interest Payments Be for SBA Coronavirus Loans?

The interest rate will be 4%, and the bill provides for an expedited origination process. 

Which Small Businesses Will Have Their Coronavirus Loans Forgiven?

A small business that uses its SBA loan funds for the approved purpose of the loan and maintains the average size of its full-time workforce (at the time it received the loan) may be eligible for loan forgiveness under the bill. In this case, the principal of the loan, or the amount borrowed, would be forgiven, and only the interest would need to be repaid. 

Can You Apply for an SBA Coronavirus Loan Now?

Not quite. The CARES Act still needs to be passed by the House of Representatives and signed into law by the president. Once that happens, the time it takes to roll out the new loans will be dependent on the capacity of the SBA and which lenders are approved to fund the loans. 

So the short answer is we’re still weeks to months away from small businesses seeing those funds… at best. 

What Can You Do if Your Small Business Can’t Wait?

We understand that right now is an extremely tough time for small businesses. If you can’t wait for an SBA loan, or you’ve been denied, you can see if you qualify for other forms of financing.

We’ve put together a robust list of relief resources on a national and state level to help small businesses secure the capital they need when they need it. 

 

What the Trillion Relief Bill Means for Small Businesses

While every effort is made to ensure the accuracy of information when a story is published, the coronavirus pandemic and Paycheck Protection Program (PPP) have caused details to change at a rapid pace. Additional guidance from the government may change or clarify certain aspects of the forgiveness process and could result in changes to the information contained in these pages. For the most up-to-date information, please visit the COVID-19 section of our website. For more information, you can call us at (855) 853-6346. Lendio is not responsible for and provides no warranty as to the accuracy of this content. Lendio does not provide legal, accounting or tax advice. The information and services Lendio provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation.

About the author

Mary Kate Miller
Mary Kate Miller
Mary Kate Miller is a writer based in Chicago, IL. She specializes in covering finance (personal and business), investing, and real estate. Her mission in life is to give readers the confidence and the knowledge needed to grow their wealth by making financial topics more accessible. When she's not writing about topics like business loans, you can find her playing armchair financial advisor to the Real Housewives.

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