Though people are feeling much more confident about the future, the economic recovery is uneven and there is still a lot of uncertainty for small businesses. During the pandemic, Congress directed additional resources to the Small Business Administration (SBA) to keep emergency funding and business capital flowing to Main Street.
As the horizon looks brighter, many businesses are wondering what SBA COVID-related resources are still available to help during the economic recovery. Here’s a review of the status of SBA programs as of May 2021.
Paycheck Protection Program
The Paycheck Protection Program (PPP) is an emergency loan program designed to provide a direct incentive for small businesses to keep their workers on payroll. Borrowers must meet certain criteria to obtain a PPP loan and the loan must be used for specific expenditures, such as maintaining payroll. If the criteria is met, borrowers can qualify to have the loan fully forgiven.
The program was set to expire on May 31, 2021, but the SBA confirmed in early May that the program had exhausted its funds before reaching the closing date.
Currently, businesses can no longer apply for a PPP loan.
Emergency Economic Injury Disaster Loans
In response to COVID-19, the SBA expanded eligibility for its Disaster Loan program, allowing small business owners, agricultural businesses, and nonprofit organizations across the entire U.S. to apply for a COVID-19 Economic Injury Disaster Loan (EIDL).
The EIDL program provides low-interest loans that can be used for working capital and normal operating expenses. In April 2021, the loan limit was raised to $500,000. Unlike a PPP loan, an EIDL loan is not forgivable, but can be repaid over 30 years.
In 2020, EIDL applicants could receive a forgivable $10,000 advance on an EIDL loan. As of July 2020, the funds for EIDL advances were depleted and are no longer available. In December 2020, a new program called the Targeted EIDL Advance was created specifically for organizations in low-income communities. You cannot apply for a Targeted EIDL Advance; the SBA is currently reaching out to previous applicants who qualify.
The SBA is still currently accepting new applications for EIDL loans. Learn more about how to apply.
SBA 7(a) Loans
SBA 7(a) loans have been available to small businesses since 1953, but the program was enhanced with COVID relief measures during the pandemic.
7(a) loans can be used for a wide array of purposes that include equipment, inventory, real estate and working capital. Borrowers can obtain loans up to $5 million at fixed rates. Unlike a conventional business loan, it does not have to be fully secured with collateral and has longer repayment terms.
COVID relief enhancements to the 7(a) program include three months of payment relief (three months of P&I payments made by the SBA that do not have to be repaid and are considered nontaxable income) and a waiver of fees.
COVID relief enhancements are available until Sept. 30, 2021.
SBA 7(a) loans are always available to eligible small businesses through a participating lender such as LSB. Contact a member of our small business lending team.
Restaurant Revitalization Funds
The Restaurant Revitalization Fund (RRF) was established in March 2021 to target restaurants and other eligible businesses hard-hit by the pandemic and in danger of closing.
This program provides restaurants with funding equal to their pandemic-related revenue loss of up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses by no later than March 11, 2023.
Applications opened on May 3, 2021 and the funds have already been exhausted. Stay tuned for additional information.
Shuttered Venue Operators Grant
This program provides emergency assistance to venues affected by COVID-19. Businesses that have suffered the greatest economic loss are prioritized to have their applications processed first.
Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. Grant funds must be used for specific expenditures as outlined by the SBA..
The SBA is currently accepting SVOG applications. Learn more about how to apply..