US Small Business Resource Center

The Foundation believes small business owners and start-up entrepreneurs fuel the engine of local and national economies all over the world. We are deeply committed to supporting these businesses during this uncertain time with clear, tangible steps to access capital and additional resources.  
 
Our commercial and philanthropic efforts focused on these communities include our dedication to our urban investments, whose work spans comprehensive community and economic development.  Now more than ever we are marshalling our resources, our insights, and our global network to support small businesses struggling with the economic fallout of COVID-19. 
 
The August Foundation is committed to delivering information on initiatives to help small businesses and communities around the world:   In addition to our own efforts, we have compiled information and resources to help small businesses navigate accessing capital and support during this unprecedented time. 
 
Note: The below is not comprehensive for all 50 states and local jurisdictions and is intended as a guide. You should consult federal and local community resources for the most up-to-date information. 
 

CARES Act

Paycheck Protection Loans

The content in this section was last updated on April 20, 2020. 
 
Please note: The initial $349 billion that was allocated under the CARES Act to PPP loans has been exhausted. As of April 20, 2020, we expect that the U.S. Congress will approve additional funding in the coming days 
for PPP loans. We expect more updates in the coming days and will share information as it becomes available. 
 
Understanding the CARES Act Paycheck Protection Program Loans 
 
For small businesses, the cornerstone of the Coronavirus Aid, Relief, and Economic Security  (CARES) Act is the $349 billion Paycheck Protection Program, an emergency lending facility to provide cash-flow assistance to businesses negatively impacted by the COVID-19 pandemic. Federal resources also include Economic Injury Disaster Loans and Emergency EIDL Grants. 
 
Note: Paycheck Protection Program loans became available on April 3, 2020 for small businesses and sole proprietors and became available on April 10, 2020 for self-employed individuals and independent contractors. Please note: As of April 20, 2020, the initial $349 billion that was allocated under the CARES Act to PPP loans has been exhausted.

​

What is the Paycheck Protection Program? 
 
The Paycheck Protection Program provides small businesses with loans that may be partially or fully forgiven and are 100% federally guaranteed (SBA PPP Loans) This program leverages the existing (SBA) 7(a) lending program and current 7(a) lenders, while vastly increasing the available amount, improving loan terms, streamlining borrower requirements, and providing for the expansion of eligible lenders for SBA PPP Loans Please note, PPP Loans are available on a first come, first served basis.

​

Who is Eligible?
 
For-profit businesses, not-for-profit organizations, veterans organizations, and Tribal business concerns that meet the following 3 criteria: 
 
Are either    

a) Entities with fewer than 500 employees or small entities as defined by the SBA; certain industries may have higher maximum employee levels OR

b) sole proprietors, independent contractors and self-employed individuals 
 
Were in operation on February 15, 2020 
 
Will certify, among other things, that the uncertainty of current economic conditions makes the loan necessary to support ongoing operations With the exception of businesses with a NAICS industry code beginning with 72 (primarily hospitality and food service industries), certain franchise businesses, and businesses that have received investment from an SBIC, a business’s employee count will include the employees of its affiliates (as defined by the SBA). Please refer to the guidance under “What are the Affiliation Restrictions?” below for more information about the Affiliate rules.

​

What Size is the Loan? 
 
The maximum loan size is the lesser of (i) $10 million or (ii) 2.5x average total monthly “payroll costs” 
 
If the business has already received an SBA Economic Injury Disaster Loan (EIDL) and chooses to refinance that loan with an SBA PPP Loan, the outstanding EIDL loan amount can be added to the loan amount, subject to the $10 million cap 
 
How are “Payroll Costs” Defined and Calculated? 
 
Payroll costs for businesses include salaries, wages, cash tips, payments for vacation, parental, family, medical, or sick leave, and group health care benefits, as well as certain other employment-related expenses Payroll costs for sole proprietors and independent contractors includes wages and net earnings from self-employment 
 
Compensation for an individual employee, sole proprietor or independent contractor above $100,000 annually (pro-rated for the period) is excluded The average payroll will be calculated over (i) the year prior to the loan origination, (ii) for seasonal employers, the period between February 15, 2019 through June 30, 2019 or, at the election of the borrower, March 1, 2019 through June 30, 2019, or (iii) the period between January 1, 2020 and February 29, 2020 for businesses not in operation during the period between February 15, 2019 and June 30, 2019

Economic Injury Disaster Loans and Emergency Economic Injury Grants

The content in this section was last updated on April 20, 2020. 
 
Emergency Injury Disaster Loans (“EIDLs”) and Emergency Economic Injury Grants (“EIDL Grants”) provide cash assistance for businesses suffering substantial economic injury due to COVID-19 across all 50 states, Washington D.C. and the territories. 
 
Please note: As of April 20, 2020, we expect that the U.S. Congress will approve additional funding in the coming days for EIDLs. We expect more updates in the coming days and will share information as it becomes available.

​

Who Is Eligible?
 
Certain businesses that were in operation on January 31, 2020 that have suffered economic injury due to COVID 19 including: 
 
● Entities with 500 or fewer employees, including businesses, cooperatives, ESOPs, tribal small business concerns, and small agricultural cooperatives

● Businesses with more than 500 employees that meet the applicable size standard for SBA based on industry

● Sole proprietorships and Independent contractors

● Private nonprofits (of any size)

● Note: For EIDLs, businesses with 500 or fewer employees do not require the affiliation analysis that may be required for certain businesses under the SBA PPP Loans

​

What Can an EIDL Be Used For? 
 
EIDLs are available to pay for expenses that could have been met had the COVID-19 pandemic not occurred, including: 
 
● Payroll costs including paid sick leave to employees

● Increased costs due to supply chain interruptions

● Rent or mortgage payments ● Obligations that cannot be met due to revenue losses

​

What are the Key Terms of the EIDL? 
 
● Up to $2 million loan amount

● Interest rate of 3.75% annually for small businesses and 2.75% annually for non-profits

● Up to 30-year loan term

● Requires personal guaranty for loan amounts above $200,000

● Submission of tax returns is not required

​

If I Apply For an EIDL, Can I Also Get an SBA PPP Loan? 
 
Businesses can apply for and receive both EIDLs and SBA PPP Loans but the loan proceeds cannot be used for the same purpose What This Means:  If you use EIDL proceeds to cover payroll for certain workers in April, you cannot use SBA PPP Loan proceeds for payroll for those same workers in April, although you could use SBA PPP Loan proceeds for payroll in March or for different workers in April

​

Key Things To Know About EIDL Loans 
 
Under the CARES Act, EIDL provisions have been expanded: 
 
● EIDLs can be approved by SBA based solely on an applicant’s credit score

● EIDLs of less than $200,000 can be approved without a personal guarantee

● SBA is not requiring real estate collateral and will take a general security interest in business property

● Businesses need not have been in business for the one-year period prior to the COVID-19 pandemic

● If you applied for an EIDL prior to the COVID-19 national emergency declaration, you may have been denied because your specific geography was not yet eligible. You can now re-apply for an EIDL.

​

What Is an EIDL Grant?
 
● An emergency $10,000 cash advance that may be requested during the EIDL application process that SBA will fund within three days of applying for the EIDL

● The EIDL Grant does not need to be repaid, even if the application for the EIDL is denied 
 
Note: If you obtain both an SBA PPP Loan and an EIDL Grant, the EIDL Grant will be reduced from the amount of forgiveness under the SBA PPP Loan

​

Who Is Eligible for an EIDL Grant?
 
Anyone who is eligible to apply for an EIDL, retroactive to January 31, 2020 to allow those who have already applied for EIDLs to also receive the EIDL Grant 
 
Where Do I Apply?
 ● SBA is currently accepting applications online. Click ​here​ to apply through December 31, 2020 ● SBA resource partners are available to help guide you through the EIDL application process. Find the nearest Small Business Development Center, Women’s Business Center, or SCORE mentorship chapter at ​https://www.sba.gov/local-assistance/find/

For Further Reading 
 
● SBA Resource Guide - English

● SBA Resource Guide - Spanish

● United States Senate Committee on Small Business and Entrepreneurship’s ​Guide to the CARES Act

​

For any specific questions about the CARES Act and how it may impact your business, we strongly encourage that you contact your legal counsel.