COVID19 (Coronavirus) Small Business Administration Loans
From the federal Small Business Administration (SBA):
"SBA provides low-interest disaster loans to businesses of all sizes, private non-profit organizations, homeowners, and renters. SBA disaster loans can be used to repair or replace the following items damaged or destroyed in a declared disaster: real estate, personal property, machinery and equipment, and inventory and business assets."
Paycheck Protection Program
The Coronavirus Aid, Relief and Economic Security Act (CARES Act) allocates additional funding to two different loans operated by the federal Small Business Administration. Both non-profits and for-profits with under 500 employees are eligible for the loans. Please note that applying for either one of the loans may mark you ineligible for the other loan. Please consider the specifics of each loan before applying to either.
From the Small Business Administration:
"The Paycheck Protection Program is designed to provide a direct incentive for small businesses to keep their workers on payroll by providing each small business a loan up to $10 million for payroll and certain other expenses.
If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable."
The CARES Act was passed on 3/27/2020. The specifics on the program and are currently being developed. You can keep up to date on the information on the Paycheck Protection Plan here. Our attorneys at Vorys have also prepared information on the Paycheck Protection Program which can be found here.
The US Chamber of Commerce has also released this helpful guide on applying for the PPP.
*OPRA previously reported that businesses receiving any Medicaid funds were not eligible for this loan. This restriction was removed during the final negotiations of the CARES Act in the US Senate.
Economic Injury Disaster Loans
Ohio small businesses and nonprofits impacted by the coronavirus (COVID19) are now eligible for the SBA's Economic Injury Disaster Loan. From the SBA:
"Economic Injury Disaster Loans — up to $2 million* These loans are for small businesses, agricultural cooperatives, aquaculture enterprises and nonprofits affected by disaster to help meet working capital needs or normal business operating expenses through the recovery period. Businesses are eligible for these loans regardless of whether or not they have suffered property damage."
To expedite the application process, applicants should have the following documents ready: complete copies of their most recent federal income tax return and a completed and signed IRS Form 4506T, a schedule of liabilities, personal financial statement, monthly sales figures, a current year-to-date profit-and-loss statement, and a year-end profit-and-loss statement and balance sheet for that tax year if the most recent federal income tax return has not been filed.
Once an application has been submitted, the SBA will review the information and determine eligibility and make a determination.
Additional Resources Updated 4/2: