3.30.2020 COVID-19 Update

Sec. 1110 of the Phase 3 bill authorizes banks participating with the SBA program to make emergency “grants” of up to $10,000 within 3 days to a qualified applicant. The qualified applicant pretty much just needs to show that they are facing economic hardship due to COVID-19 and need to get the funds to pay employees, rent, etc. If they eventually get approved for the big Payroll Protection Program loan (PPP loan under 7(a)) then the initial $10,000 will be rolled into that loan; but if they are denied the big loan – the $10,000 was just an outright freebie (under most circumstances).

The SBA has posted a link for Economic Injury Disaster Loans, which includes the request for the $10,000 grant: https://covid19relief.sba.gov/#/

It is our understanding from talking with various bankers that the SBA has NOT released any guidance yet on the application process for the PPP loans, but the bill specifically references “refinance” of 7(b) loans into the 7(a) program. We encourage you to discuss with your banker, but we believe the correct process will be to apply under the above link if you want to be considered for the $10,000 grant and additional guidance will be coming on the steps necessary to get the PPP loan.

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