CARES Act - SBA Loans

Goals

1. Determine the criteria needed to qualify for a venture-backed business for SBA loans under the newly signed CARES Act.
2. Provide an overview of the process for applying for the loans.
3. Identify the financial institutions that are authorized to provide the loans.
4. Detail the conditions and portions of those loans that could be forgiven under the CARES Act and the required time period, particularly focusing on venture-backed small businesses.

Early Findings

The CARES Act created a new loan program called the “Paycheck Protection Program” Loans. Paycheck Protection Program loans may have a principal loan amount of up to $10 million. Loans may have a term of up to 10 years and bear interest at a rate of no more than 4% per annum (with payments to be deferred for at least 6 months and at most 1 year). The loan can be prepaid without penalty. In addition, Paycheck Protection loans will be allowed to be used for the following additional purposes:
  • Payroll support (including paid sick or medical leave);
  • Employee salaries;
  • Mortgage, rent and utility payments;
  • Insurance premiums; and
  • Other debt obligations.

Criteria Needed to Qualify


Process for Applying

1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations.
2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments.
3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here.
4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan).
If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents
(final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

Identify Financial Institutions Authorized to Provide Loans.

Loan Forgiveness




In addition to this public search, we scanned our proprietary research database of over 1 million sources and were unable to find any specific research reports that address your goals.

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