CARES Act: SBA Borrowing Options for Small Businesses and Nonprofits

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On March 31, 2020, the U.S. Department of the Treasury issued its first piece of guidance to the Paycheck Protection Program that was outlined in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) that was signed into law on March 27, 2020. While much of this release is consistent with the initial text of the CARES Act, borrowers should review the updated guidance to be aware of any changes that have occurred that include a reduction in the interest rate from 4 percent to 0.5 percent, a change in the required term from ten years to two years, and changes in the terminology describing how large the loan can be. The U.S. Department of the Treasury encourages applicants to apply as quickly as possible because there is a funding cap, and lenders need time to process the loans.

This white paper (which incorporates the U.S. Department of Treasury changes) discusses the details of the Paycheck Protection Program and the extension of the Small Business Administration’s Economic Injury Disaster Loan Program and provides information on how to apply for this much-needed funding.

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