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SBA Loans and Relief for Small Businesses and Hospitality Industry

William Furman, Senior Area Manager for the Small Business Administration South Carolina District office, joined us for an important update on the recently passed stimulus bill and the assistance programs available through the SBA.

He discussed the current round of funding and the new loan and relief programs that are aimed at more intentionally helping struggling small businesses and businesses in the accommodation and hospitality industry.


Stay Connected

Newsletter: sba.gov/updates
Twitter: @SBAgov
Contact:William.furman@sba.gov; (843) 324-0788

Important Links


Where We Are

This round of economic aid funding was intended to support the hardest-hit small businesses and those in underserved segments, including women, minorities and veterans.

Funding Options

Loan Programs

Paycheck Protection Program

Changes to First Draw PPP Loan

  • PPP eligibility expanded

– Housing cooperatives
– Destination marketing organizations
– Certain 501(c)(6) organizations
– Eligible news organizations

  • Borrower can now select a covered period between 8 and 24 weeks
  • Offers Second Draw PPP loan option for hardest hit small business
  • Allows for deduction of expenses covered with forgiven PPP loan debt on federal taxes
  • Updates simplified forgiveness form to include PPP loans of up to $150,000 (makes process much easier for business, lenders and SBA)
  • SBA no longer subtracts EIDL Advance from PPP loan forgiveness amount

Second Draw PPP Loan

  • For most borrowers, max loan amount is 2.5x average monthly 2019 or 2020 payroll costs, up to $2 million
  • For borrower in Accommodation and Food Services sector, max loan amount is 3.5x average monthly 2019 or 2020 payroll costs, up to $2 million
  • Second Draw PPP loan applicants must submit the information on SBA Form 2483-D
  • Must have previously received a First Draw PPP loan and covered periods cannot overlap

Debt Relief on SBA 7(a), 504 and Microloans

  • As a part of the CARES Act, SBA is authorized to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans reported in regular servicing status (excluding PPP loans)
  • Borrowers need not apply for this assistance.  SBA provides this assistance automatically as provided below:

– For loans not on deferment, SBA will make monthly payments based on the next payment due on eligible loans for a total amount equivalent to no more than 6 months of installment payments.
– For loans currently on deferment, SBA will begin making monthly payments with the first payment due after the deferment period ends for a total amount equivalent to no more than 6 months of installment payments.

EIDL

  • Deadline extended to 12/31/21
  • Use of proceeds: working capital and normal operating expenses
  • Terms: 3.75% interest for businesses (fixed); 2.75% for nonprofits (fixed); 30 years; no pre-payment penalty or fees

Grants

Targeted EIDL Advance

  • New program in the Economic Aid Act
  • Only for targeted businesses, don’t apply for it; no action is required until contacted by SBA
  • Will balance out a previous EIDL Advance to the full $10,000 if the business is 1) in a low-income community; 2) suffered greater than 30% economic loss; and 3) has 300 or fewer employees
  • Targeted EIDL FAQs

Shuttered Venue Operators Grant (SVOG)

  • Applications not yet open; will need SAM.gov registration to apply
  • Eligible entities

– Live venue operators or promoters
– Theatrical producers
– Live performing arts organization and motion picture theater options
– Relevant museum operators, zoos and aquariums who meet specific criteria
– Talent representatives
– Up to five business entities owned by an eligible entity that also meet the eligibility requirements

  • Plus

– Must have been in operation as of Feb. 29 2020
– Must not have applied for/received PPP loan on or after December 27, 2020


Posted on
February 15th 2021
Written by
Josh Walker
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