SBA Small Business Relief

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, allocates $349 billion to help small businesses keep workers employed amid the current circumstances they are encountering. The CARES Act provides funding for the Paycheck Protection Program, modifies the existing Economic Injury Disaster Loan (EIDL) program and provides immediate loan payment relief for businesses with current SBA guaranteed loans. The following is an overview of the key components of and eligibility requirements of these programs:


SBA will pay the principal, interest, and any associated fees owed on SBA Guaranteed loans for 6 months, as follows:

  • Existing borrower not on deferment: beginning with the next payment due on the loan.
  • Existing borrower on deferment: beginning with the next payment due on the loan after the deferment period.
  • New borrower: Beginning with the first payment due on the loan, but only for new loans made within the first six months starting from the date of enactment, March 27, 2020.
  • Eligibility: Businesses with 500 employees or fewer.
  • Up to $2 million can be provided to help meet financial obligations and operating expenses that could have been met if the disaster did not occur.
  • Loans can be made based solely on credit scores.
  • The interest rate on EIDLs will be 3.75% interest rate for small businesses.
  • The first twelve payments will be deferred and not become due until one year after the original disbursement. Interest does accrue during this time.
  • The term of these loans will be up to 30 years.
  • Eligibility: Advances are available to small businesses, sole proprietors, independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses in operation on January 31, 2020.
  • For those that apply for the Economic Injury Disaster Loan (EIDL), an advance of up to $10,000 will be provided to small businesses within several days of applying for the loan.
  • The advance does not need to be repaid, even if the grantee is subsequently denied an EIDL.
  • Funds can be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
  • The SBA guarantee will be 100% through the end of 2020. Payments will be deferred for the first 6 months. Loans will be administered through local and regional banks; any federally regulated bank may become an SBA lender for this purpose.
  • The current rate is fixed at 1.0% with a term of 2 years. Interest rate will not exceed 4%.
  • Eligibility: Small businesses (as defined by SBA size standards, generally >500 employees, but  may be >1,500 employees depending on sector), sole proprietors, the self-employed, and independent contractors.
  • SBA’s standard “no credit elsewhere” test is waived. No personal guarantee or collateral required and no additional fees will be applied.
  • Size of loans: Up to $10 million. Amount is based on recent payroll costs (compensation paid to individuals, including the self-employed). Compensation in excess of $100,000 a year to any individual is excluded.
  • The business must certify the loan will be used to retain workers, maintain payroll, make mortgage / lease payments, and pay utilities.
  • Loans may be forgiven, up to an amount equaling eligible payroll, mortgage interest, rent and utility cost, incurred during a 8-week period starting from loan origination. Compensation in excess of $100,000 a year to any individual, independent contractor or sole proprietor will not qualify.
    • Non-payroll costs cannot make up more than 25% of the loan forgiveness amount.
    • Loan forgiveness is reduced by layoffs or pay reductions in excess of 25%. 
    • Loan forgiveness is not treated as taxable income.
  • Lender must be an SBA Express Approved Lender, borrower must have a current relationship with lender.Fees are permitted and the SBA will guarantee 50% of the loan.
  • Businesses need to have been operational as of March 13, 2020. Proceeds to be used to reopen or ongoing survival of the business.
  • Collateral is not required, but a personal guarantee may be required. The loan is not forgivable.
  • Interest of the loan is prime + up to 6.5% and has a max term of 7 years.
  • The maximum loan amount is $25,000.

The University of Georgia Small Business Development Center (SBDC) has 17 offices across the state, covering every county, with consultants available to assist small business owners through the SBA Economic Injury Disaster Loan application process.


Many of our offices are working remotely, so if you do call and reach a voicemail, we will work to return your call as soon as possible. Please consider us a resource to assist you during these challenging times and let us know how we can be of service.