The CARES Act (Coronavirus Aid, Relief and Economic Security Act) came up with a new assistance program for small businesses (with employees below 500) to cushion the coronavirus's effect. The initiatives revolve around the paycheck protection program, SBA debt relief program, SBA Express bridge loans, etc.
Paycheck Protection Program (PPP)
The paycheck protection program is a loan directed to encourage small businesses to keep workers on their payroll and discourage mass laying off of workers.
The Treasury, alongside the SBA, announced some PPP forgiveness for loans amounting to $50,000 and below. Later last year, in conjunction with the small business administration, the Treasury made available a loan forgiveness application for paycheck protection of $50,000 and below.
The idea behind this act was to maintain strong tax stewardship of the tax system and make available administrative and financial relief to small and medium scale businesses in America.
SBA Debt Relief
With this program comes instant relief to small businesses with non-disaster SBA loans, emphasizing microloans, 504 and 7(a). The SBA will take care of all loan payment on such SBA loans like interest, fees, and principal for half a year
Express Bridge Loans for SBA
With this loan, small businesses that already have a relationship with any SBA Express Lender can access as much as $25,000.
Economic Injury Disaster Loans and Loan Advance
This law was signed into law when 2020 was rounding up, which extended the deadline for the economic Injury disaster loan till the last day of 2021. It also specified an extra budget for paycheck protection program loans to reduce the financial burden on small businesses due to the coronavirus.
The EIDL advance program alongside the economic injury disaster loan was opened to all qualified applicants with significant turmoil and hardship due to the pandemic. This program comes with loan interest assistance for small businesses and other nonprofit organizations, which is long-term.
Also, there is an EIDL advance from the SBA of as much as $10,000 (a thousand dollars for each employee) in a bid to provide relief for businesses that are struggling and experiencing difficulties. Such emergency grants are not eligible for repayment.
Biden Administration Commit to Equal Access to SBA Relief
On the 22nd of February, President Biden made some changes to the SBA COVID-19 relief program available to the public.
According to POTUS, SBA will set up a 14-day loan application for PPP targeted at nonprofit firms and businesses with less than 20 workers. With this, communities and lenders can have the needed time to work with small-sized companies and get their application in a while, ensuring that other companies eligible for PPP also have the required time to make their application and be supported before the expiration of the program.
There were further changes revealed from the SBA intending to open the PPP to further small businesses that do not qualify for it. During the implementation of such modifications, SBA will work in conjunction with community partners to ensure that many stakeholders are aware. SBA will also improve its relationship with partners to make equity goals advance, helping with better delivering of funding and avoiding abuse, fraud, and waste.
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