- Small Business Administration
- Paycheck Protection Program
- Houston-Galveston Area Local Development Corporation
The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19).
- SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
- These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
- SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.
- Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19).
For questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail email@example.com.
Paycheck Protection Program
The CARES Act established a new $349 billion Paycheck Protection Program to provide relief to millions of small businesses so they can sustain their businesses and keep their workers employed.
“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said Secretary Mnuchin. “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”
The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. More details are available at SBA.gov/Coronavirus. It is important to note, the new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.
Loan Terms and Conditions
Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietor, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
- Maximum loan amount up to $10 million
- Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
- All loans under this program will have the following identical features
- Interest rate of 0.5%
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
Small Business Bridge Loan Program
Businesses applying for an economic injury disaster loan (EIDL) may have to wait six to eight weeks before their loan is approved through the Small Business Administration.
Those businesses may apply with the H-GALDC for immediate access to capital to help with costs related to COVID-19. The bridge loan may be paid back once approved for the EIDL. Visit the Houston-Galveston Area Local Development Corporation for more information and to apply.
Harris County COVID-19 Forgivable Loan Program
In partnership with H-GALDC, Harris County has established a $10 million-backed loan program to help area small businesses economically impacted by COVID-19 stay open and meet necessary operating expenses. These zero-interest loans are up to $25,000 each with a five-year term and a loan forgiveness component.
Loan terms include:
- Up to $25,000 per loan
- 0% interest
- Five-year terms
- Three-month grace period
- 100% of the loan forgiven after five years of program compliance
- Option of applying loan forgiveness proceeds to the tax bill
- No prepayment penalty
To qualify for a loan, small businesses must meet the following requirements:
- Located in Harris County
- In business on or before Jan. 1, 2019
- Property taxes in good standing with Harris County Tax Office
- Proof of negative impact by COVID-19
- Less than $15 million net worth
- Average net income of $5 million or less
For more information and to apply, visit Harris County Loans.