Skip to Content
Home | covid resources information | Small Businesses

Small Businesses

 
 On this page:
 
Congress has passed a number of assistance programs aimed at supporting small business owners through these challenging times. More information can be found by visiting the Small Business Administration’s Coronavirus Relief site.
 

Paycheck Protection Program

The Paycheck Protection Program (PPP) has resumed. Small businesses may now apply for PPP loans through their financial institution. Business owners can view eligible PPP lenders by using the SBA’s finder tool.

 

First Draw PPP Loans

Loan Details

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll. First Draw PPP Loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

  • PPP loans have an interest rate of 1%.
  • Loans issued prior to June 5, 2020 have a maturity of two years. Loans issued after June 5, 2020 have a maturity of five years.
  • Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
  • No collateral or personal guarantees are required.
  • Neither the government nor lenders will charge small businesses any fees.

Eligibility

The following entities affected by Coronavirus (COVID-19) may be eligible:

  • Sole proprietors, independent contractors, and self-employed persons
  • Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
  • Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans’ organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
    • 500 employees, or
    • That meets the SBA industry size standard if more than 500
  • Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

How & When to Apply

You can apply for a First Draw PPP Loan until March 31, 2021. SBA is currently accepting First Draw PPP loan applications from participating lenders. Lender Match can help connect you with a lender. You can also view all lenders near you on a mapAll new First Draw PPP Loans will have the same terms regardless of lender or borrower.

If you wish to begin preparing your application, you can download the following PPP borrower application form to see the information that will be requested from you when you apply with a lender:

Paycheck Protection Program First Draw Borrower Application Form (revised 01-08-21)

 

Second Draw PPP Loans

Loan Details

The Paycheck Protection Program (PPP) now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP Loan with the same general loan terms as their First Draw PPP Loan. 

Second Draw PPP Loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.

Maximum loan amount and increased assistance for accommodation and food services businesses

For most borrowers, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Who May Qualify

A borrower is generally eligible for a Second Draw PPP Loan if the borrower: 

  • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses
  • Has no more than 300 employees; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020

How & When to Apply

You can apply for a Second Draw PPP Loan from January 13, 2021, until March 31, 2021. SBA is currently accepting Second Draw PPP loan applications from participating lenders. Lender Match can help connect you with a lender. You can also view all lenders near you on a mapAll Second Draw PPP Loans will have the same terms regardless of lender or borrower. 

If you wish to begin preparing your application, you can download the following PPP borrower application form to see the information that will be requested from you when you apply with a lender:

Paycheck Protection Program Second Draw Borrower Application Form (released 01-08-21)

 

PPP Loan Forgiveness

First Draw PPP Loan forgiveness terms

First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs

Second Draw PPP Loan forgiveness terms

Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8 to 24-week covered period following loan disbursement:

  • Employee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • At least 60 percent of the proceeds are spent on payroll costs

How and when to apply for loan forgiveness

A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender.

To apply for loan forgiveness:

1. Contact your PPP Lender and complete the correct form:

Your Lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a Lender equivalent.

The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.

2. Compile your documentation:

Payroll (provide documentation for all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):

  • Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees
  • Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
    • Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
    • State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state
  • Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount

Non-payroll (for expenses that were incurred or paid during the covered period and showing that obligations or services existed prior to February 15, 2020):

  • Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements
  • Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments
  • Business utility payments: Copies of invoices and receipts, cancelled checks or account statements

This list of documents required to be submitted to the Lender is not all-inclusive.

3. Submit the forgiveness form and documentation to your PPP Lender:

Complete your loan forgiveness application and submit it to your Lender with the re­quired supporting documents and follow up with your Lender to submit additional documentation as requested. Consult your Lender for additional guidance and provide requested documentation in a timely manner.

4. Continue to communicate with your Lender throughout the process:

If SBA undertakes a loan review of your loan, your Lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your Lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.

Please Note:
Recent legislation has eliminated the original requirement to deduct the amount of EIDL Advance you may have received from your PPP loan forgiveness. Additional guidance and updated forms are forthcoming.

Frequently Asked Questions about PPP Loan Forgiveness (10-13-2020) 

 

The Michigan Small Business Development Center is providing free resources and guidance to help small business owners during this time.

View the SBA’s PPP Loan Data Tracker

 

COVID-19 Economic Injury Disaster Loans

In response to the Coronavirus (COVID-19) pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan (EIDL). The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to COVID-19.

Frequently Asked Questions about COVID-19 EIDL Loans

PURPOSE

To meet financial obligations and operating expenses that could have been met had the disaster not occurred

TERMS

  • 3.75% for businesses (fixed)
  • 2.75% for nonprofits (fixed)
  • 30 years
  • No pre-payment penalty or fees

USE OF PROCEEDS

Working capital andnormal operating expenses

Example:continuation of health care benefits, rent, utilities, fixed debt payments.

COLLATERAL REQUIREMENTS

  • Required for loans over $25,000
  • SBA uses a general security agreement (UCC) designating business assets as collateral, such asmachinery and equipment, furniture and fixtures, etc.

FORGIVABLE

  • NO – EIDL Loan
  • YES – EIDL Advance*

*Advance funds have been fully allocated and are not currently available

MATURITY

30 years

PAYMENTS

Deferred oneyear; interest still accrues
Borrower may make payments if they choose to do so.

Set up online payments throughPay.govORmail payments to:

U.S. Small Business Administration
721 19th Street
Denver, CO 80202

Be sure to include EIDL loan number on mailed-in checks.

 

SBA is currently accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations.

If you have already applied via the streamlined application portal, please do not resubmit your application.

Eligibility

Small business owners and qualified agricultural businesses in all U.S. states and territories are currently eligible to apply for a low-interest loan due to COVID-19.

Agricultural businesses with 500 or fewer employees are now eligible as a result of new authority granted by Congress in response to the COVID-19 pandemic.

Agricultural businesses include those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).

Frequently Asked Questions for Faith-Based Organizations Participating in the Paycheck Protection Program and the Economic Injury Disaster Loan Program

Frequently Asked Questions Regarding Agricultural and Farm Loan Collateral Security and the SBA Economic Injury Disaster Loan Program (EIDL)

 

Apply for an SBA COVID-19 EIDL
 

SBA Express Bridge Loans

Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.

Terms

  • Up to $25,000
  • Fast turnaround
  • Will be repaid in full or in part by proceeds from the EIDL loan

 
Debt Relief

7(a), 504, and Microloans

Initial Debt Relief Assistance

As a part of the CARES Act, SBA is authorized to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans reported in regular servicing status (excluding PPP loans).  This debt relief to borrowers was originally dependent on the loan being fully disbursed prior to September 27, 2020 and does not apply to loans made under the Economic Injury Disaster Loan (EIDL) program.

These original provisions were amended on December 27, 2020 through the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act (Economic Aid Act).  The Economic Aid Act revised the eligibility criteria for assistance to include all 7(a), 504, and Microloans approved up to September 27, 2020 even if not fully disbursed. All other provisions for initial debt relief remained the same.

Borrowers need not apply for this assistance.  SBA provides this assistance automatically as provided below:

  • For loans not on deferment, SBA will make monthly payments based on the next payment due on eligible loans for a total amount equivalent to no more than 6 months of installment payments.
  • For loans currently on deferment, SBA will begin making monthly payments with the first payment due after the deferment period ends for a total amount equivalent to no more than 6 months of installment payments.

SBA has notified 7(a), 504, and Microloan Lenders that it will pay these borrower loan payments. Lenders are to report to SBA periodically on the amounts due once a loan is fully disbursed. Payments collected after March 27, 2020 may be applied to the outstanding loan balance or returned to the borrower at the borrower’s discretion.

Additional Debt Relief Assistance

The Economic Aid Act also authorized additional debt relief payments to 7(a), 504, and Microloan borrowers beyond the 6-month period prescribed in the CARES Act.  The level of assistance varies based on when the loan was approved and will begin on or after February 1, 2021.  Please contact your Lender for questions on the availability of this assistance for your SBA loan.

 THE INITIATIVES DESCRIBED ABOVE ARE LIMITED TO THE LEVEL OF AVAILABLE FUNDING PROVIDED BY CONGRESS.

 

Disaster Home & Business Loans

For current SBA Serviced Disaster (Home and Business) Loans: If your disaster loan was in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through March, 31, 2021.

What does an “automatic deferral” mean to borrowers?

  • Interest will continue to accrue on the loan.
  • 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due.
  • The deferment will NOT cancel any established Preauthorized Debit (PAD) or recurring payments on your loan.  Borrowers that have established a PAD through Pay.Gov or an OnLine Bill Pay Service are responsible for canceling these recurring payments.  Borrowers that had SBA establish a PAD through Pay.gov will have to contact their SBA servicing office to cancel the PAD.
  • Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply those payments normally as if there was no deferment.
  • After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments.  Borrowers that cancelled recurring payments will need to reestablish the recurring payment.

If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your Loan Servicing Office directly using the following information:

  • Birmingham Disaster Loan Servicing Center:
    • Phone: 800-736-6048
    • Email: BirminghamDLSC@sba.gov
  • El Paso Disaster Loan Servicing Center:
    • Phone: 800-487-6019
    • Email: ElPasoDLSC@sba.gov
 

Paid Family & Sick Leave Tax Credit

The Families First Coronavirus Response Act (the "FFCRA"), signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. For additional guidance, please refer to the IRS’s website.

Back to top