CARES Act Emergency Grants
The entity applies for a small business loan through a lending institution who is authorized to make loans under the SBA’s current Business Loan Program and, as part of that process, can immediately request funds with only a tax return and/or credit score as determined by the lending institution/SBA loan process. No collateral or personal guarantees are required. The funds may be used for providing paid sick leave for employees unable to work due to the direct effect of COVID-19, maintaining payroll to retain employees during the disruption, meeting increased costs to obtain materials not available from the original source due to interrupted supply chain, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.
SBA Loan Process
The applicant shall not be required to repay any of the amounts advanced even if subsequently denied a loan under the Small Business Loan Program. If an applicant received an advance as part of the loan process and ultimately is approved for a loan under the Disaster Loan Program, the advanced amount shall be reduced from any other loan forgiveness amount for payroll costs. These grants are available until December 31, 2020.
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We will be keeping you informed about the CARES Act of 2020 through this “Inside the CARES Act” series on our Biz Law Blog. For other topics related to COVID-19, visit our Coronavirus Thought Leadership Connection.