CARES Act Small Business Debt Relief Program

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act offer assistance to business owners during this critical time. The Small Business Debt Relief Program (Program) provides immediate relief to small businesses with non-disaster SBA loans, such as 7(a), 504, and microloans. Under the Program, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.
The following questions and answers were provided by the U.S. Senate Committee, Small Business & Entrepreneurship, about the Program.
Which SBA loans are eligible for debt relief under the Program?
7(a) loans not made under the Paycheck Protection Program (PPP), 504 loans, and microloans. Disaster loans are not eligible.
How does debt relief under the Program work with a Paycheck Protection Program (PPP) loan?
Borrowers may separately apply for and take out a PPP loan, but debt relief under the Program will not apply to a PPP loan.
What is the eligibility for a 7(a), 504, or microloan?
In general, businesses must meet size standards, be based in the U.S., ability to repay, and have a sound business purpose. To see whether your business is considered small, you will need your business’ 6-digit North American Industry Classification System (NAICS) code and 3-year average annual revenue. Each program has different requirements, see Funding Programs for more details.
What is a 7(a) loan and how do I apply?
7(a) loans are an affordable loan product of up to $5 million for borrowers who lack credit elsewhere and need access to versatile financing, providing short-term or long-term working capital and to purchase an existing business, refinance current business debt, or purchase furniture, fixtures and supplies. In the program, banks share a portion of the risk of the loan with SBA. There are many different types of 7(a) loans, you can visit here to find the one that is best for you. You apply for a 7(a) loan with a bank or a mission-based lender. SBA has a free referral service tool called Lender Match to help find a lender near you.
What is a 504 loan and how do I apply?
The 504 Loan Program provides loans of up to $5.5 million to approved small businesses with long-term, fixed-rate financing used to acquire fixed assets for expansion or modernization. It is a good option if you need to purchase real estate, buildings, and machinery. You apply through a Certified Development Company, which is a nonprofit corporation that promotes economic development.  Lender Match can help you find a lender near you.
What is a microloan and how do I apply?
The Microloan Program provides loans up to $50,000 to help small businesses and certain nonprofit childcare centers to start up and expand. The average microloan is about $13,000. These loans are delivered through mission-based lenders who are also able to provide business counseling. See Lender Match to find a microlender near you.
Who can help me apply for a SBA loan?
SBA resource partners can guide you through the loan application process. You can locate your nearest Small Business Development Center (SBDC) or Women’s Business Center here.

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