Coronavirus Financing Options for Small Businesses and Non-Profit Organizations
March 31, 2020
Your legal team at Rothman Gordon, P.C. is tracking the federal programs designed to help small businesses and organizations impacted by the Coronavirus crisis. This alert provides a high-level summary of the loans available for eligible businesses and organizations. Contact one of our experienced corporate attorneys for more information on the loan applications.
Our team is ready to help you navigate the Coronavirus financing options and provide tailored guidance by examining your business structure, operations, and working capital needs.
CARES Act: Economic Injury Disaster Loans
This federal loan program provides loans up to $2 million for certain working capital costs and debts to eligible businesses, agricultural cooperatives, and private non-profit organizations that have suffered substantial economic damage as a result of the Coronavirus for the period beginning Jan 31, 2020. At the time you apply for an EIDL loan, you can also apply for an Emergency EIDL Grant of up to $10,000.00, which does not have to be repaid.
CARES Act: Paycheck Protection Program Loans
This federal loan program offers loans up to $10 million with a maximum interest rate of 4 percent, that are 100% guaranteed by the SBA, to eligible businesses and organizations of less than 500 employees, including sole proprietorships, self-employed individuals, certain non-profit organizations, qualified veterans organizations, and certain Tribal businesses. The loan can be used for certain payroll costs, costs related to health care benefits, employee salaries, rent payments, certain mortgage obligations, interest on debt obligations, and utility payments. There is no collateral requirement, no prepayment penalties, and no “credit elsewhere test.”
*An earlier version of this bulletin described the COVID Working Capital Assistance Program offered by the Pennsylvania Department of Community and Economic Development. As of 4/2/2020, this program has been closed.