SBA Covid Relief – All programs available to small businesses
Did your Small Business get the SBA COVID reliefs for which it is eligible?
In an effort to help small businesses stay afloat as they navigate through the economic crisis resulting from the COVID-19 pandemic, the U.S. Small Business Administration (SBA) is providing a variety of relief options to small businesses. We’ve summarized them below for your convenience. Keep reading to see if your Small Business is taking advantage of all the SBA COVID reliefs for which it is eligible.
SBA COVID relief options
Paycheck Protection Program (PPP)
This SBA COVID relief program ended on May 31, 2021. The PPP is a loan given to small businesses as an incentive for them to keep their employees on payroll as they navigate the economic crisis resulted from the COVID-19 pandemic. Small businesses with a PPP loan may be eligible for PPP loan forgiveness.
PPP Loan Forgiveness
A PPP loan may be forgiven in full if within 8 to 24 weeks (Covered Period) after the loan was disbursed.
- Employee and compensation levels are maintained,
- Loan proceeds are spent on payroll costs and other eligible expenses, and
- At least 60% of the loan proceeds are used for payroll costs.
A PPP loan borrower may apply for loan forgiveness for used up loan proceeds anytime up to the maturity date of the loan.
If an application for loan forgiveness is not submitted within 10 months following the Covered Period after the loan disbursement, the borrower will have to start making loan repayments on the PPP loan.
To apply for PPP loan forgiveness:
- Obtain from your lender the proper form and complete it or apply using SBA portal
- Gather required supporting documents (such as payroll reports, business rent payments, business utility payments, etc. for the Covered Period) – Click here for additional information on supporting documentation
- Submit the completed form along with the supporting documents to your lender
- Follow up with your lender on the outcome of the SBA review process.
If you need assistance applying for the PPP loan forgiveness, contact experienced professionals at H&S Accounting & Tax Services!
Economic Injury Disaster Loan (EIDL)
The Economic Injury Disaster Loan (EIDL) is a low-interest loan available to small businesses, agricultural businesses with up to 500 employees, and nonprofit organizations as relief for income loss due to COVID-19. This SBA COVID relief loan is not forgivable. It is payable over 30 years, with no pre-payment penalties.
Starting the week of April 6, 2021, the amount of the EIDL loan may be up to a maximum of $500,000. EIDL loans in an amount less than $500,000 approved before April 7, 2021, may be eligible for a loan increase subject to the maximum of $500,000.
Need help applying for the EIDL loan or requesting a loan increase? Experienced professionals at H&S Accounting & Tax Services are here for you! Contact us today.
Targeted EIDL Advance and Supplemental Targeted Advance
Applicants for an SBA COVID relief EIDL loan may be eligible to receive funds of up to $15,000 that the recipient does not have to repay. These funds are provided as:
- Targeted EIDL Advance: up to $10,000, and
- Supplemental Targeted Advance: $5,000
– Targeted EIDL Advance
Applicants for EIDL (except for agricultural enterprises) are eligible provided they meet the following criteria:
- The business address is in a low-income community (as defined in section 45D(e) of the Internal Revenue Code)
- Show more than 30% reduction in income during an eight-week period beginning on March 2, 2020, or later
- Have 300 or fewer employees
The applicant for an EIDL loan will receive an invitation from the SBA via email to apply for these advances if the applicant’s business is in a low-income area.
– Supplemental Targeted Advance
Applicants for EIDL (except for agricultural enterprises) are eligible provided they meet the following criteria:
- Complete the Targeted EIDL Advance application
- The business address is in a low-income community.
- Show more than 50% economic loss during an eight-week period beginning on March 2, 2020, or later compared to the same period of the previous year.
- Have 10 or fewer employees
The option to apply for this SBA COVID relief is presented during the application for the EIDL Advance.
Shuttered Venue Operators Grant (SVOG)
- Eligibility and Amount
Eligible applicants for the SBA COVID relief SVOG may qualify to receive 45% of their gross earned revenue up to $10 million. Eligible entities that can apply for the SVOG include: live venue operators or promoters, theatrical producers, live performing arts organization operators, museum operators, motion picture theater operators, talent representatives. Eligible entities must have been in operation as of February 29, 2020. The SVOG is reduced by any PPP loan amount received on or after December 27, 2020.
- Application Processing Priority
On January 20, 2021, the SBA updated its proposed plan for issuing these grants. Accordingly, applications from those who suffered the most economic loss are processed based on the following priority schedule:
First priority: first 14 days of grant awards – entities with 90% or greater gross revenue loss for April – December 2020 due to the pandemic
Second priority: next 14 days of grant awards – entities with 70% or greater gross revenue loss for April – December 2020 due to the pandemic
Third priority: beginning 28 days after first and second priority awards – entities with 25% or greater gross revenue loss between one quarter of 2019 and the corresponding quarter of 2020
After all the priority periods have passed, supplemental SVOG funding may be available for recipients of first, second, and third priority SVOG awards who suffered a 70% or greater revenue loss for the most recent calendar quarter (as of April 1, 2021, or later).
- Allowable expenses
Expenses for which the SVOG funds may be used include:
- Payroll costs
- Rent payments
- Utility payment
- Schedule debt payments
- State and local taxes and fees
- Insurance payments
Click here to see more allowable expenses.
- Recordkeeping Requirements
SVOG recipients of the SBA COVID relief are required to retain documentation evidencing their compliance with eligibility and other requirements. They must keep employment documentation for four years after receipt of the grant and all other documentation for three years.
Restaurant Revitalization Fund
Applications for the Restaurant Revitalization Fund are now closed. In this SBA COVID relief, the funds are provided (in an amount not to exceed $10 million per business or not to exceed $5 million per physical location) to restaurants and other eligible similar businesses that have suffered pandemic-related revenue loss. These funds are not to be repaid as long as they are used for eligible expenses by March 11, 2023.
SBA Debt Relief
- 7(a), 504, and Microloans
If your Small Business had a loan under the SBA 7(a), 504, and Microloan programs, provided such loan was approved up to September 27, 2020, even if not fully disbursed and reported in regular servicing status. The SBA is authorized to pay six months of principal, interest, and any associated fees that your Small Business owes.
This debt relief does not apply to Paycheck Protection Program (PPP) loans or Economic Injury Disaster Loan (EIDL).
Your Small Business does not need to apply for this relief as it is done automatically by the SBA. Click here for more information.
Additional Debt Relief Assistance: Additional debt relief payments to the SBA 7(a), 504, and Microloans beyond the six months may be available, depending on when such loan was approved. This additional SBA COVID relief assistance begins on or after February 1, 2021. Call your lender to find out if your SBA loan qualifies for this assistance!
- Disaster Home and Business Loans
SBA disaster loans approved before 2020 and reported in regular servicing status as of March 1, 2020, are granted automatic deferment of principal and interest payment through March 31, 2022. Borrowers with such loans do not have to make any payments on their loans through March 31, 2022. However, interest will continue to accrue during the deferment period. Borrowers may also choose not to take advantage of the automatic deferment and continue to make regular payments on their SBA disaster loans. If a borrower had set up an automatic payment method to pay their SBA disaster loan and would like to take advantage of the automatic deferment, they need to disable it. Borrowers who choose the automatic deferment have to resume making regular payments immediately after March 31, 2022.
As we continue to navigate through the Coronavirus pandemic, the above information may be subject to updates. Contact H&S Accounting and Tax Services if your small business needs assistance applying for any current SBA COVID reliefs for which it may be eligible.
