Small Business Administration (SBA) emergency grants included under the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020 provide immediate grants within three days of application submission until $10,000 for qualifying entities. These entities include small businesses, sole proprietors, private nonprofits, independent contractors, cooperatives, ESOPs, and tribal units, all with fewer than 500 employees applying for loans in response to COVID-19. After verification, the government, through lending institutions that work with the SBA, will provide grants of up to $10,000. The applicant entity had to be in operation for at least one year, which can be waived, but certainly before January 31, 2020.
CARES Act Emergency Grants
The entity applies for a small business loan through a lending institution that is licensed to make loans under the current SBA business loan program and, as part of that process, can immediately request funds with only a tax return and/or credit score as determined by the lending institution/SBA lending process. No deposit or personal guarantee is required. Funds can be used to provide paid sick leave to employees unable to work due to the direct effect of COVID-19, maintain payroll to retain employees during the disruption, address increased costs for obtain materials not available from the original source due to an interrupted supply chain, make rent or mortgage payments, and repay obligations that cannot be fulfilled due to loss of income.
SBA loan process
The applicant will not be required to repay any amounts advanced, even if they are subsequently refused a loan under the Small Business Loans Program. If an applicant received an advance as part of the loan process and is ultimately approved for a loan under the Disaster Loan Program, the amount of the advance will be deducted from any other loan amounts. loan exemption for salary costs. These grants are available until December 31, 2020.
©2022 Norris McLaughlin PA, All Rights ReservedNational Law Review, Volume X, Number 89