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Covid relief for SMEs in the US


• Not restrictive in case of what the loan can be used for • Administered through SBA • Eligibility requirements are straightforward – not sector based / for certain industries alone • Company should fall within a Declared Disaster area in the US and most areas around the country are included • Any business with less than 500 employees can apply • Financial queries - past 12 months gross revenues (that is sales before any deductions are made); cost of good sold (direct costs) as of 31 Jan 2020, number of employees • Apart from this, most questions were relating to the business in general – how many years of trading, date of incorporation, details of owners, whether the company is owned by another corporation, etc • Declaration that the company or owners are not under inquiry for criminal offenses, perjury, fraud and the like • Loan-related question - Is the applicant or any listed owner currently suspended or debarred from contracting with the Federal government or receiving Federal grants or loans? • You can also choose an optionto be considered for an advance of US$ 10,000

Paycheck Protection Program (PPP)

  • Meant specifically to protect jobs

  • Loans have to be used for specific purposes of meeting specific costs "only" if it has to be waived off (forgiven)

  • SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

  • This program is for any small business with less than 500 employees

SBA Express Bridge Loans

  • Can get up to US$ 25,000 if the company has a business relationship with an SBA Express Lender

  • Faster process

  • Will be repaid in full or in part by proceeds from the EIDL loan

  • No restriction of how a business can use this

  • The SBA Website explains it as – it’s meant to overcome the temporary loss of revenue they are experiencing and can be a term loan or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan

SBA Debt Relief

  • Loans from third-party providers where the SBA will pay the principal, interest and fees of current 7a loans for a period up to 6 months

  • Also applicable for new 7a loans issued prior to Sep 27th, 2020

  • 7a loans are specific to the COVID program, which will be disbursed through preferred lenders. Each lender may have some qualifying criteria

  • Types of 7a loans –

  1. Standard 7a up to 5 million,

  2. Small 7a up to 350,000,

  3. SBA express up to 350,000 also with a faster turn around period that the Small loan. For the express loan SBA only guarantee up to 50% of the loan, for the small loan

  4. SBA guarantees up to 75%

  5. Export express – up to US$ 500,000

  6. Export working capital – up to US$ 5 million

  7. International trade - up to US$ 5 million also meant for export businesses that are suffering

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