NFSA is monitoring the latest information that is coming out on a daily basis from the federal level. We realize these are trying and sometimes confusing times for our members. As part of the CARES Act, the Small Business Administration (SBA) is offering three types of loans for eligible businesses. In addition, the Federal Reserve is offering loans available to both small and large businesses through the new Main Street Lending Program. Many of our members will be able to take advantage of these programs, and we encourage you to check them out. The loans have different purposes, eligibility requirements, and lending maximums. These are all summarized below.

Main Street Lending Program

Purpose: Working capital

Eligibility: Companies with up to 10,000 employees or with revenues of less than $2.5 billion which were in good financial standing before COVID-19

Amount: Minimum amount is $1 million; maximum will vary between new loans and existing loans which are being increased

Overview: Through Main Street Lending Program, the Federal Reserve is facilitating four-year loans of varying amounts (minimum of $1 million) to eligible businesses. Principal and interest payments are deferred for one year. Eligible banks may offer new Main Street loans or expand the amount of pre-existing loans. Loans may be offered by any US-insured depository institution, bank holding company, or savings and loan holding company. Read full text of the Federal Reserve’s press release on the program here.

Paycheck Protection Program

Purpose: Workforce maintenance and workspace retention

Eligibility: Businesses with fewer than 500 employees and businesses with more than 500 employees which meet the SBA’s size standards for certain industries outlined here

Maximum: $10 million

Overview: The Paycheck Protection Program will offer loans in amounts determined by calculating 125% of a business’s 8 weeks of average payroll. Payments on these loans are deferred for six months. While eligibility is not contingent on how the loan is used, borrowed monies used to pay for payroll, mortgage interest, rent, and utilities will be fully forgiven if at least 75% is used for payroll costs. It is not yet clear what calculation will be applied for forgiveness of loans if a borrower does not meet this 75% threshold. Find more information here. View the SBA’s responses to Frequently Asked Questions on the PPP here.

Economic Injury Disaster Loans

Purpose: Working capital, revenue replacement

Eligibility: Small businesses who meet one of the eight criteria found here

Maximum: $10,000

Overview: The Economic Injury Disaster Loan program is designed to provide small businesses with working capital and to replace revenue lost because of the COVID-19 pandemic. Loans are expected to be paid within three days of application submission, and eligible businesses will not be required to repay the loan. Find more information and apply for an Economic Injury Disaster Loan here.

SBA Express Bridge Loans

Purpose: Fast revenue replacement

Eligibility: Small businesses with existing relationships with an SBA Express Lender

Maximum: $25,000

Overview: Small businesses with prior relationships to SBA Express Lenders may use this program to quickly access up to $25,000 to ideally be used as a bridge to apply for an Economic Injury Disaster Loan. These loans must be repaid, in full or in part, using Economic Injury Disaster Loan funds. Find more information here. Apply for a SBA Express Bridge Loan by contacting your local SBA District office.

Find more information on the SBA’s COVID-19 programs here.

This article has additional information on SBA programs available.

We know these are challenging times, it is our hope that some of these programs will helpful to NFSA members across the country. We stand with you during this pandemic, and pledge to you that we will be vigilant in keeping an eye on all available programs.