Coronavirus Aid, Relief and Economic Security Act, CARES Act for Small Businesses

The CARES Act tasks the Small Business Administration with overseeing the distribution of millions of dollars in loans and grants to help small businesses survive the pandemic. It also provides additional funding for SBA’s Resource Partners to provide advice and training to help small businesses respond to the unprecedented challenges in communities throughout the country.

Paycheck Protection Program

What is the Paycheck Protection Program (PPP)?

A new $350 billion loan program at SBA for small businesses, self-employed, and gig workers to help maintain payroll due to the due to the COVID-19 pandemic. If employers maintain at least 75% of their payroll,  the loans would be forgiven to the extent funds are spent on payroll, mortgage payments, rent and utilities.

Who is Elegible?

  • Any business concern, 501 (c) (3) organization, veteran’s organization, or Tribal business concern that employs no more than 500 employees (or the size standard in a number of employees established by the Administration for the industry in which such business operates)
  • Faith based organizations deemed to be a 501(C)(3)
  • Sole proprietors
  • Independent contractors
  • Self-employed individuals

How Does the Process Work?

All current 7(a) lenders are eligible lenders as well as Community Development Financial Institutions (CDFIs).

How Can I Apply?

Interested borrowers are also encouraged to inquire with a local 7(a) lender regarding whether they are participating in the PPP. The vast majority of banks and CDFIs are participating.

How much?

The maximum size of the loan is 250% of an employer’s average monthly payroll cost during the period Feb. 15, 2019 to June 30, 2019, capped at $10 million. To the extent that a loan is not forgiven, it will be repayable over two years at 1% interest.  

How can I use it?

  • Employee compensation, including salaries, wages, commissions, or similar compensation; cash tips or equivalents; vacation, parental, family, medical, or sick leave; payment required for providing group health care benefits (including insurance premiums); payment of retirement benefits; and payroll taxes.
  • Any compensation or income of a sole proprietor or independent contractor no greater than $100,000 in one year
  • Payment of Interest on mortgage obligations, rent, utilities, and Interest on pre-existing debt obligations

Why a PPP Loan?

  • Waives guarantee and annual fees to keep costs low
  • Waives credit elsewhere requirement, personal guarantee requirement, and collateral requirements to expedite the loan approval process
  • Defers repayment of principal, interest, and fees for 6 months to give small businesses time to get through the crisis
  • Forgives loans if employers maintain their payrolls
  • Low interest rate for portions of loan that are not forgiven

EIDL Loans and Grants

What is an Economic Injury Disaster Loan (EIDL)?

A low-interest, fixed rate loan that can provide up to $2 million in assistance for small businesses that can be used to pay immediate expenses during an emergency. This loan is based upon a business’ credit but being denied the EIDL loan does not prohibit a business from receiving an EIDL Grant.

What is an EIDL Grant?

The CARES Act creates a new grant program, leveraging SBA' s Office of Disaster Assistance, to provide small businesses with quick, much-needed capital.

Who is Eligible?

  • Private nonprofit organizations, small agricultural cooperatives
  • Businesses; cooperatives; ESOPs; and tribal business concerns with 1500 or fewer employees
  • Independent contractors
  • Sole proprietors (whether or not self-employed)

How does the process work?

  • Eligible applicants who apply for an EIDL may request up to $10,000 be immediately disbursed. The amount need not be repaid, regardless of the loan decision. SBA has capped EIDL Grants at $1,000 per employee.
  • EIDL borrowers may apply for the Paycheck Protection Program, but when determining loan forgiveness, the advance EIDL grant is taken into consideration.

How can I apply?

There are a couple of ways to apply. The SBA bas an online portal where small businesses can upload documents and apply for a loan, or they can download the PDF on the agency's website and mail the forms.

How Can it be Used?

  • Any allowable purpose under the DDL program
  • Provide paid sick leave, maintain payroll, and meet increased costs
  • Make rent or mortgage payments, and repaying unmet obligations.

The U.S. Small Business Administration and the Department of Treasury have made the following COVID-19 loan resources available to you:


$275 Million for SBA’s Resource Partners and the Minority Business Development Agency to provide vital mentorship, guidance, and expertise to small business owners and entrepreneurs impacted by COVID-19.

HOW WILL GRANTS BE USED? SBA's Resource Partners – Small Business Development Centers (SBDCs) and Women's Business Centers (WBCs) –and the Minority Business Development Centers (MBDCs) will be able to expand their reach and better support small business owners with COVID-19 concerns.
WHAT SPECIFIC TOPICS WILL BE COVERED? • Provides Assistance with Loan Application Process
• Access risks and prevention of COVID-19
• Handle supply chain disruptions
• Telework
• Protect against cyberthreats
• Handle less travel and foot traffic
• Any other COVID-19 concerns
WHERE CAN I FIND A RESOURCE PARTNER NEAR ME? Small Business Development Centers
Click Here
Women's Business Centers
Click Here
Minority Business Development Centers
Click Here