The U.S Small Business Administration (SBA) and Federal Reserve have created special loan programs to help small to medium sized businesses that are struggling due to Coronavirus (COVID-19).
SBA RESOURCES IN English
*The National Resource Guide includes a service called SCORE which gives free business mentoring from retired executives.
SBA RESOURCES in Español
*SCORE: La guía comercial nacional de la SBA habla sobre un servicio llamado SCORE.
FED program for small and mid-sized businesses in English:
- For companies with up to 10,000 employees and $2.5 billion in revenue
- Available to borrowers that may have also received PPP loans
- Establishes two facilities: "New Loan" and "Expanded Loan"
- New loan sizes from $1 million up to $25 million
- Expanded loan sizes from $1 million up to $150 million
- Loan terms:
- 4-year unsecured term loans
- SOFR + 250-400 basis points
- No prepayment penalty
- Restrictions on compensation, stock repurchases, and distribution apply
- Many "direct loan" CARES Act restrictions on borrowers do not apply, including those that would have related to labor and offshoring
- Loan applications will be managed through the borrower's bank
A borrower that accepts a Main Street loan will be required to make several certifications and attestations,
- Attest that it requires financing because of the COVID-19 pandemic;
- Attest that it will make reasonable efforts to maintain its payroll and retain its employees during the term of the Eligible Loan;
- Attest that it will follow compensation, stock repurchase, and capital distribution restrictions that apply to direct loan programs under Title IV of the CARES Act 4003(c)(3)(A)(ii);
- Refrain from using the proceeds to repay other loan balances and refrain from repaying other debts of equal or lower priority (except mandatory principal payments); and
- Certify there are no conflicts of interest as described under CARES Act 4019.