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While many of you have become well-versed in the CARES Act’s Payroll Protection Program (PPP) loan application process and are giving thought to addressing the PPP Loan Forgiveness Calculations, we thought that now would be a good time to consider and understand what other loans are available from the Federal Government as a result of the COVID-19 health crisis.  As always, the Gettry Marcus Financial Assistance Services Group is here to help.

SBA Economic Injury Disaster Loans (EIDL)

Maximum borrowing under this program is $2m with loan proceeds used to pay fixed debts, payroll, accounts payable, and other bills that cannot be paid because of the disaster’s impact.  The interest rate is 3.75% for small businesses and 2.75% for non-profit organizations, with loan repayment terms as long as 30 years, but generally no longer than 10 years. Collateral is required for loans over $25,000.  Eligibility is based on the size, type of business, and financial resources available.

For additional information:
https://www.sba.gov/sites/default/files/articles/EIDL_Information_and_Documentation_-_3-23-2020.pdf

Federal Reserve Main Street Lending Program

This program consists of two separate loan facilities, the Main Street New Loan Facility (MSNLF), which is for loans that originate after April 8, 2020,  and the Main Street Expanded Loan Facility (MSELF), which is for loans that originated before April 8, 2020.  These loans are intended for larger businesses that generally do not meet the eligibility requirements of EIDL or PPP loans.  Eligible borrowers must have no more than 10,000 employees, annual 2019 revenue less than or equal to $2.5 billion, and also meet other eligibility requirements.  Loan sizes for the MSNLF and MSELF loans are up to $25 million and $150 million, respectively. 

For additional information:
https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm

Government Funding Limits

As many of you are aware, certain loan programs have reached their government funding limits. In these situations, loan applications may be put on hold until additional funding is made available (subject to passage by Congress). However, if you are considering any of the loan programs when, and if, funds become available, it is still advisable to understand their guidelines and to start preparing necessary documentation now.

For additional assistance, please contact your Gettry Marcus advisor who will work with our COVID-19 Crisis Advisory Task Force to provide additional assistance regarding loan provisions and the respective application processes for the CARES Act Payroll Protection Program (PPP) loan, the SBA Economic Injury Disaster Loan, or the Federal Reserve Main Street Lending Program Loans.