Latest for April 1, 2020:
The SBA issued guidance regarding the Payroll Protection Program Loan (PPP). Below are links to the overview sheet, guidance forms for borrowers and lenders, and the application.
The guidance sheets provide an excellent overview from both the borrower and lender perspective so I will not restate the specific terms. Please click on the link to the forms and below.
MCDC Staff is standing by to answer questions and assist our lenders in completing the information and expedite the process. If you have questions, please email 7aloans@michigancdc.org. Or, you can go to our website and click on the link to the forms there and download them for dissemination to your borrowers.
Many of your smaller borrowers will be well served to obtain an Economic Injury Disaster Loan (EIDL) in lieu of a PPP loan. The particulars of the EIDL are below AND they get the added benefit of receiving an EID Grant of $10,000 simply for applying.
SBA Economic Injury Disaster Loan (EIDL) Program.These loans are obtained directly from the SBA (see link below).
- Who is eligible?
- Businesses, either for profit or non-profit (501(c)(3)) with <500 employees (FTE) in business prior to January 31, 2020
- Available loan amount?
- Up to $2 million but will be determined by an SBA Underwriter
- Loan Term?
- Up to 30 years
- Loans may be prepaid without penalty regardless of the term
- SBA Fees?
- All fees are waived
- Interest Rate?
- 3.75% if applicant is a for-profit business;
- 2.75% if applicant is a non-profit (501(c)(3))
- Collateral?
- Not for loans <$25,000
- Yes, for loans >$25,000; requires all available collateral, no appraisals required on RE (there is some recent indication SBA is waiving the collateral requirement for all EIDL loans)
- Personal Guaranties?
- Not for loans <$25,000
- Yes, for loans >$25,000
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Timing:
-
Estimated at 30 days, application to receipt of fun
- Loan forgiveness:
- None
- How do I apply?
- Direct with the SBA at www.sba.gov/disaster
SBA Economic Injury Disaster Grant (EIDG) Program.
- Who is eligible?
- Businesses, either for profit or non-profit (501c (3)) with <500 employees (FTE) in business prior to January 31, 2020
- Available grant amount?
- $10,000 to any small businesses and non-profits that apply for an SBA EIDL within three days of applying for the loan
- The grant does not have to be repaid even if the grantee is subsequently denied an EIDL
- Use of the grant?
- Maintain payroll
- Provide paid sick leave
- Meet increased production costs due to supply chain disruptions
- Pay business obligations including debt payments, rent and mortgage payments
- How do I apply?
- Direct with the SBA at www.sba.gov/disaster
Mark Williams, President # # #
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