Phase 3: H.R. 748, The CARES Act
It’s financial assistance through a federal guarantee of 100% for small business interruption loans made by 7(a) lenders of up to $10 million (loan amount is tied to a payroll amount formula). It will be provided to be used toward payroll support, employee salaries, mortgage payments, insurance premiums and any other debt obligations. A portion of these loans – equivalent to 8 weeks of payroll cost for employees earning up to $100 thousand per year – can be forgiven to the extent there is no workforce reduction. If you employ someone, you are provided with a financial incentive to retain them as an employee since the loan will be forgiven in the future.
You must find a Small Business Association (SBA)-approved lender and work through this lender. The lender will ask you to complete an application for a 7(a) loan. The SBA does not directly lend money to small businesses; it guarantees the loan by acting as a co-signer. To obtain a loan, you will need typical documents requirements, including personal financial statement and a business plan with your financial statements.