CARES Act Title I Loan Programs Summary

MSC values your business and remains committed to supporting you during these difficult times. In March 2020, the United States government passed the Coronavirus Aid, Relief and Economic Security Act (or "CARES Act") to direct stimulus money to help companies stay in business. While some of the programs established under the CARES Act have expired (e.g., Main Street Lending Program), a few key programs are still available for certain borrowers, including the Paycheck Protection Program (PPP) and certain others.

Recently, the government passed the Title III of Division N of the Consolidated Appropriations Act of 2021 (the "Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act,"" hereinafter, the "SBNV Act"), which provides a second round of stimulus for certain small businesses. Among other things, the SBNV Act replenishes PPP funds to be lent to (1) certain businesses that are deemed newly-eligible for PPP loans under the SBNV Act, (2) certain businesses that were already eligible for a PPP loan under the CARES Act but did not obtain a loan in the first round of PPP lending, and (3) certain businesses that have already received and fully-used their first round PPP funds, so that they may take a "second draw" from the PPP. The SBNV Act also makes modifications for all PPP loans generally, expanding the scope of allowable uses for PPP funds, adding flexibility in certain areas, and simplifying the loan forgiveness process for certain loans.

If you are seeking your first PPP loan or a new loan through another SBA loan program under the CARES Act, or if you have questions about your existing "first draw" PPP loan, we hope the below summary will provide you some insight as you determine if your company is eligible for stimulus funds. If you are seeking a "second draw" PPP loan, you may consult the PPP Second Draw summary for further insights about your eligibility.

We will continue to post new or updated information as it becomes available. This information and all the information below are not intended to provide legal advice or to be a substitute for legal advice or counsel. In addition, the information provided here might be subject to additional guidance from lenders, the federal government and/or other institutions.

The below details apply to "first-draw" PPP loans. For details regarding taking a "second draw" on PPP funds, please refer to the PPP Second Draw summary.

Must be in operation on February 15, 2020.

Businesses that meet any of the following criteria are eligible:

Businesses with no more than 500 employees who have a principal place of residence in the U.S., or businesses which meet the applicable size standard for the industry as provided by SBA's existing regulations, or businesses that meet both prongs of the SBA's "alternative size standard" test (maximum tangible net worth is $15 million or less, and average net income after Federal income taxes - excluding carry-over losses - for the prior two fiscal years is $5 million or less);
Businesses in the accommodation and food services industries with more than one physical location but no more than 500 employees at each location
Nonprofit organizations
Eligible independent contractors and sole proprietors.
Religious-based organizations

Who is ineligible?

Engaging in illegal activity
Household employers (i.e., employers of nannies or housekeepers)
Owner of 20% of business is incarcerated, on probation, parole, subject to indictment, information, arraignment or other means by which formal charges are brought, or within the last 5 years, for any felony, been convicted, pled guilty, pled nolo contendere, been placed on pretrial diversion, or been placed on parole or probation
Applicant or business controlled by applicant is delinquent or defaulted on a loan from a federal agency during last 7 years
Political or lobbying businesses;
Certain other types of businesses listed in SBA eligibility regulations (13 C.F.R. § 120.110), other than non-profit and religious-based organizations, such as speculative businesses (i.e., hedge funds);
Publicly-traded companies, as of December 27, 2020 (loans to publicly-traded companies that were originated prior to this date are grandfathered in).

The Act waives the SBA affiliation rules in 3 cases where a business concern:

(1) has not more than 500 employees and a NAICS code beginning with 72; (2) operates as a franchise with a franchise identifier code; or (3) that receives financial assistance from an SBIC.

Franchisees of franchise brands listed on the SBA Franchise Directory are eligible to apply for a PPP loan, provided the franchisee meets the size standards under the CARES Act. Franchise brands that have previously been denied listing may request listing to receive PPP loans, and the SBA will not apply the affiliation rules to franchisees of those franchise brands requesting listing.

Note: Certain debtors in bankruptcy may also be eligible for PPP loans. The SBNV Act establishes a process for debtors in bankruptcy to obtain loans if court-approved. However, the applicable section of the Act is not yet effective. Debtors in bankruptcy should seek the advice of legal counsel before pursuing a PPP loan.

This information is not intended to provide legal advice or to be a substitute for legal advice or counsel. In addition, the information provided here might be subject to additional guidance from lenders, the federal government and/or other institutions.

Maximum loan amount is the lesser of

(a) 2.5 times the average monthly payroll costs incurred over the trailing 12 months, plus any outstanding Economic Injury Disaster Loans (EIDLs) made between 1/31/20 and 4/3/20, less any EIDL funds already advanced.

(b) $10 million.

Treasury guidance regarding how each different business type (e.g., sole proprietors, partnerships, corporations, non-profits) should calculate loan amounts can be found here.

Important Information:

Funding is first-come, first-served.
EIDLs made between 1/31/2020 and 4/3/2020 used for payroll costs may be refinanced into a PPP loan. EIDLs made during the same period not used for payroll costs do not affect PPP eligibility.

Available for small businesses, sole proprietorships, independent contractors, and self-employed individuals. The SBA website has a list of current SBA lenders. Other lenders will be available to make loans as soon as they are approved and enrolled in the program.
To apply, borrowers must complete the application (SBA Form 2483, available here) as well as submit payroll documentation. Borrowers seeking loans for less than $50,000 may use a more simplified application (SBA Form 3508S, available here; instructions here).
Applications must be submitted by March 31, 2021.

Good Faith Certification:

Applicants must make a "good faith certification" to the following:
- that the current economic uncertainty due to COVID-19 makes the loan necessary to support the business's operations;
- the business will use the funds to retain workers, maintain payroll, or make lease, mortgage, and utility payments;
- the business is not receiving duplicative funds for the same uses.
For loans of $2 million or more, and for certain specific types of businesses*, the SBA imposes certain additional requirements on the application certification:
- To determine if a loan is "necessary" due to economic uncertainty, borrowers must now take into account (1) their current business activity, and (2) their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business.* Borrowers determined to have not made the certification in good faith will not receive forgiveness for the loan, but will not be referred for enforcement if they repay the loan in full.
- Borrowers receiving loans of $2 million or more must submit a "Loan Necessity Questionnaire" (for-profits here, non-profits here), within ten days of receiving the form from the lender. This form will be used to aid the SBA's audit process.
Borrowers that return the funds in full, will be deemed to have made the certification in good faith.

*Note: The Treasury Department has changed guidance here several times. As of May 13, 2020, this requirement no longer applies to all borrowers, only borrowers with loans greater than $2 million. But Treasury has also previously determined that publicly-traded companies with "substantial market value and access to capital markets” are "unlikely” to make the certification in good faith, and has thereby pressured those companies to return loan funds in full or "be prepared to demonstrate to the SBA . . . the basis for the certification.” Similarly, Treasury has indicated that the SBA will aggressively review applications for businesses that are owned in whole or in part by private equity firms. It is unclear whether this logic still applies for such businesses with loans less than $2 million.

It is unclear whether Treasury’s economic necessity requirement would withstand legal scrutiny, given its potential contradictions with the CARES Act. Nonetheless, borrowers who have applied for or intend to apply for a PPP loan for $2 million or more may wish to reconsider taking the loan in light of these new requirements, even if the application has already been approved or the loan funds disbursed. Such borrowers may want to take steps to confirm their (economic) rationale for applying for PPP funding.

Documentation:

At minimum, applicants will need to provide documentation to verify the number of employees currently on the payroll, and average monthly payroll costs for the prior year, such as:
- Payroll processor records, Payroll tax filings, Form 1099-MISC, or income and expenses (for a sole proprietorship); or
- Other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.
Applicants may also be asked to provide documentation verifying current payrates for employees, historical numbers and payrates of employees throughout 2020, and recent monthly mortgage interest, rent, and utilities statements.
Examples of documentation required:
- IRS Form 940 and 941;
- Payroll Summary Report for 2019 and YTD 2020 (including a list of compensation of an individual employee that is in excess of $100,000 annual salary), with corresponding bank statement;
- Employee Pay Stubs as of February 15, 2020 (or another corresponding period) with corresponding bank statement;
- Breakdowns of payroll benefits (vacation, allowance for dismissal, group healthcare benefits, retirement benefits, etc.);
- Certifications that all employees live within the United States, or a detailed list with corresponding salaries of all employees outside the United States;
- Trailing twelve-month profit and loss statement (as of the date of application) for all applicants;
- Articles of Incorporation/Organization of each borrowing entity;
- Bylaws/Operating Agreement of each borrowing entity;
- Owners' Driver's Licenses;
- Most recent Mortgage Statement or Rent Statement (Lease);
- Most recent Utility Bills (Electric, Gas, Telephone, Internet, Water).
Applicants will also need to certify that the requested loan amount can be calculated from the tax documents provided, and that those documents are valid and identical to documents submitted to the IRS.

SBA will guarantee 100% of the loan.
Payments (including interest) deferred until the date on which the amount of loan forgiveness is remitted to the lender, including for PPP loans which are sold on the secondary market, or 10 months after the end of the borrower's covered period if the borrower declines to apply for forgiveness.
Interest will be at 1%, and will accrue during the deferment period.
Loan matures at 2 years for loans made prior to June 5, 2020, but lenders and borrowers can agree to modify existing loan terms. Loans made after June 5, 2020, automatically require a minimum term of 5 years.
No requirement for personal guarantee or collateral.
No requirement that the borrower demonstrate that it cannot obtain credit elsewhere
The SBA will not collect any yearly or guarantee fees for the loan.
All prepayment penalties are waived.

Allowable uses include:

Payroll costs, including:
- Wage, salary, commission, or similar compensation to employees;
- Payment of cash tip or equivalent;
- payments for vacation, parental, family, medical or sick leave;
- Allowance for dismissal or separation;
- Payments required for group health care benefits (including insurance premiums);
- Payments of any retirement benefits;
- Payments of state and local employment taxes;
Rent;
Utilities; and
Interest payments on mortgage or debt obligations incurred before February 15, 2020.
Operations expenditures, including payments for business software or cloud computing services that facilitated business operations (e.g., delivery, processing, and payment for products and services; sales and billing; HR; accounting services);
Property damage costs due to public disturbances occurring in 2020 that are not covered by insurance;
Certain supplier costs (expenditures for goods under a contract or order in effect prior to taking out the loan that are essential to the company’s business operations);
COVID 19-related worker protection expenditures, including:
- Purchase of personal protective equipment (PPE), or
- Adaptive investments to help the loan recipient comply with federal, State, or local health and safety guidelines or restrictions (e.g., expanded drive-through windows, ventilation or filtration systems, physical barriers, expansions of indoor and/or outdoor business space, onsite or offsite health screening capabilities).

Requirement: 60% of loan proceeds must be used for payroll costs.

The money cannot be used for:

Compensation of individual employees, independent contractors, or sole proprietors, in excess of an annualized salary of $100,000;
Compensation of employees with a principal place of residence outside the United States;
Qualified sick leave wages and family leave wages for which a credit is already covered by the Families First Coronavirus Response Act; or
Taxes imposed or withheld during Chapters 21, 22, or 24 of the IRC during the covered period (Feb. 15, 2020 – June 30, 2020).

Misusing loan proceeds may result in:

Being forced to repay amounts used for unauthorized purposes;
Being subject to additional liability such as charges for fraud;
Being subject to other recourse against the shareholder, member, or partners of the business for unauthorized use.

For all PPP loans under $150,000 (including "second draw" PPP loans), the SBNV Act creates a simplified loan forgiveness process and calls on the SBA to establish a new simplified forgiveness application form by January 20, 2021.

Eligible borrowers must submit a one-page certification that:

states the number of employees the borrower retained because of the loan;
estimates the total amount spent on payroll costs; and
states the total loan value.

The borrower must also attest that (1) the required certification was accurate, (2) it has complied with PPP loan requirements, and (3) it will retain relevant records that prove compliance with such requirements (4 years for employment records, 3 years for other records).

Borrowers must fill out the SBA Loan Forgiveness Application (with Instructions here) or Loan Application Form 3508EZ (for sole proprietors, independent contractors, and self-employed individuals with no employees, although applicants should review the Instructions to Form 3508EZ here to confirm that they qualify), and submit it to their lender. The Application contains, among other things, instructions for calculating expenses to confirm loan forgiveness eligibility and, where eligible, to ascertain the amount that is forgivable. Borrowers must also check a box if they received loan proceeds greater than $2 million, as such loans will be subject to an SBA loan review.

Other key loan forgiveness details include:

Eligibility for loan forgiveness will be determined based upon SBA guidance available at the time of the forgiveness application. The onus is on the borrower to accurately file for forgiveness.
Forgiveness can be up to the full principal amount and any accrued interest.
The borrower may select the "covered period" during which forgiveness is available (for costs incurred and/or paid), but the period must be between eight to twenty-four weeks after the date of loan origination.
Borrowers must apply for forgiveness within 10 months after the day of the end of the loan's covered period, otherwise the borrower must begin making payments on the loan. If the application is submitted within 10 months, the borrower will not need to make principal or interest payments before the date on which the SBA remits the loan forgiveness amount to the lender. The lender is responsible for notifying the borrower of the remittance, or that the loan or a portion of the loan was not forgiven, and the date on which the borrower’s first payment is due.
Payroll Costs:
- 60% of forgiveness amount must be for payroll costs.
- Borrowers may calculate payroll costs eligible for loan forgiveness using an "Alternative Payroll Covered Period" which correlates to the borrowers' payroll cycles.
- Payroll costs are generally incurred on the day the employee's pay is earned (i.e., the day the employee worked), and where employees are not performing work but on the payroll, payroll costs can be incurred based on the schedule established by the borrower (typically, each day the employee would have performed work).
- Borrowers may include in payroll costs those costs which are incurred but not paid during the forgiveness period, if paid on or before the next regular payroll date, and non-payroll expenses that are paid or incurred but not paid during the forgiveness period, if paid on or before the next regular billing date.
- Additional wages paid to tipped workers are forgivable.
- Borrowers may also include in payroll costs those costs which were incurred prior to but paid during the covered period.
- Payroll costs include all forms of cash compensation paid to employees, including tips, commissions, bonuses, and hazard pay.
- Employer expenses for employee group health benefits paid or incurred by the borrower are payroll costs.
- Employer contributions for employee retirement benefits are payroll costs
- Wages paid to furloughed workers are forgivable.
- Payroll costs are capped at $100,000 per employee.
- For borrowers that received loans before June 5, 2020 and elect to use an 8-week covered period, owner-employees and self-employed individuals are limited to "payroll compensation" no greater than the lesser of 8/52 of 2019 compensation or $15,385 per individual (across all businesses in which the owner-employee has an ownership stake), and owner-employees are further capped by the amount of their 2019 employee cash compensation and employer retirement and health care contributions made on their behalf. Schedule C filers are capped by the amount of their owner compensation requirement, calculated based on 2019 net profit. And general partners are capped by the amount of their 2019 net earnings from self-employment, subject to certain reductions. Borrowers using the 24-week covered period are capped at $20,833. Owner-employees with less than a 5% ownership stake in a C- or S- Corporation are not subject to this rule.
Nonpayroll Costs:
- Borrowers are not required to report payment for nonpayroll costs that they do not want to be included in the forgiveness amount
- Nonpayroll costs must be paid during the covered period or incurred during the covered period and paid on or before the next regular billing date, even if the billing date is after the covered period. But, if a borrower's nonpayroll expenses straddle the covered and noncovered period and are paid after the covered period (e.g., a borrower's "covered period" ends on July 26 and its electricity expenses for July are not paid until August 10), the borrower may seek partial forgiveness of the expenses incurred during the covered period but paid on the next regular billing date (e.g., electricity expenses for July 1-26 are forgivable).
- Eligible business mortgage interest, rent, lease, and utility costs incurred prior to the covered period and paid during the covered period are eligible for forgiveness.
- Mortgage interest and rent payments can include both real and personal property.
- Advance payments on mortgage obligations are not eligible for loan forgiveness.
- Payments on leases renewed after February 15, 2020, and on mortgages refinanced after February 15, 2020, are eligible for forgiveness.
- Amounts attributable to the business operation of a tenant or sub-tenant of a PPP borrower are not forgivable (e.g., where a borrower rents out a portion of its space or shares its space with another, it cannot obtain forgiveness for the portion of rent or mortgage expenses attributable to the subtenant or sharing business).
- Rent or lease payments, but not mortgage payments, to a related party are eligible for loan forgiveness, so long as (1) the amount of forgiveness requested is no greater than the amount of mortgage interest owed on the property during the Covered Period attributable to the space being rented by the business, and (2) the lease and mortgage were entered into prior to February 15, 2020. For purposes of this rule, the borrower and property owner are related parties "where they have any ownership in common."
- Interest on unsecured credit is ineligible for forgiveness, although interest on unsecured credit incurred prior to February 15, 2020 is an allowable use.
- Eligible operations expenditures, property damage costs, supplier costs and worker protection expenditures are eligible for forgiveness.
Loan Forgiveness Reductions:
- The amount forgiven will be reduced if the employer laid off employees or reduced salaries for certain employees between February 15, 2020, and April 26, 2020.
- Reductions for Headcount:
  - Loan forgiveness will be reduced in proportion to the reduction in headcount during the covered period as compared to the average number of Full-Time Equivalent (FTE) employees per month on the borrower’s payroll between February 15, 2019 and June 30, 2019, or January 1, 2020 and February 29, 2020.
  - Full-time employees are employees who work 40 hours or more, on average, each week. Each such employee is considered an FTE with a weight of 1.0. To calculate FTE weights for other workers, borrowers may either add the hours of all part-time employees and divide by 40, or elect, "for administrative convenience... to use a full-time equivalency of 0.5 for each part-time employee," as long as the borrower applies the chosen method consistently.
  - Borrowers are not penalized for employees who (a) were fired for cause, (b) voluntarily resigned, or (c) voluntarily requested and received a reduction of their hours, but only if the position was not filled by a new employee.
- Reduction for Salaries:
  - Loan forgiveness will be reduced in proportion to the reduction in salary during the covered period greater than a reduction of 25% for employees making less than an annualized rate of $100,000 in any 2019 pay period.
  - This calculation is performed on a per-employee basis and not in the aggregate.
  - The salary/wage reduction applies only to the decline in employee salary and wages not attributable to the FTE reduction.
- A reduction in loan forgiveness may be remedied:
  - For reductions in headcount and salary occurring between February 15, 2020 and April 26, 2020, if employees are re-hired and salaries restored by December 31, 2020, as compared to the headcount and salaries existing as of February 15, 2020, the employer will not be penalized.
  - If employers make a good faith written offer to rehire an employee and the employee rejects the offer, the reduction for that employee may be forgiven and the employee may forfeit eligibility for continued unemployment benefits. SBA guidance states that the borrower must inform the applicable state unemployment insurance office within 30 days of the employee's rejection of the offer.
  - If the employer can (1) document an inability to rehire individuals employed on February 15, 2020 and an inability to hire "similarly qualified" employees for unfilled position on or before December 31, 2020, or (2) document an inability to "return to the same level of business activity" that the business experienced before February 15, 2020 "due to compliance with the requirements established or guidance issued" by certain federal agencies from March 1, 2020 to December 31, 2020 "related to the standards for sanitation, social distancing, or any other worker or customer safety requirement related to COVID-19."
  - Borrowers receiving loans less than $50,000 are exempt from reductions to loan forgiveness based on reductions to FTE headcount or salary and wages.

*Note: The CARES Act states that the loan forgiveness covered period begins running on the date of origination, but SBA regulations state that it begins on the date of disbursement.

**Note: The SBNV Act does not make clear whether the deadline to remedy a headcount or salary reduction will be extended through March 31, 2021. The SBA is, however, expected to issue new regulations shortly which may provide further insight.

Borrowers must submit certain documentation, including:

Documents verifying eligible payroll expenses, including bank statements, tax forms, and third-party payroll reports and receipts of benefits payments.
Documents evidencing FTE numbers for the applicable periods (i.e., payroll tax filings and wage reports).
Documentation of nonpayroll expenses, such as:
- Amortization schedules and receipts of eligible mortgage interest expenses;
- Leasing agreements and receipts for eligible lease expenses;
- Utility invoices and receipts for eligible utility expenses.
For nonpayroll costs, documentation "verifying existence of the obligations/services prior to February 15, 2020 and eligible payments from the Covered Period."

*Note: The cap on compensation of employees in excess of $100,000 only applies to cash compensation (e.g., salary, wages, or tips). It does not apply to non-cash benefits, such as employer contributions to defined-benefit and defined-contribution retirement plans, payment for provision of employee benefits consisting of group health care coverage, including insurance premiums, and payment of state and local taxes assessed on compensation of employees.

The SBA may review "any PPP loans," at any time in its discretion, and may consider in that review whether a borrower correctly calculated the loan amount, properly used the loan proceeds, and/or is entitled to the loan forgiveness amount sought. This may include loans smaller than $2 million.
Borrowers must retain PPP documentation for at least 6 years after the date the loan is forgiven or paid in full, and the SBA and SBA Inspector General must be granted these files upon request. For borrowers applying for simplified loan forgiveness (i.e., for a loan under $150,000), they must retain records for 4 years for employment records, and 3 years for other records.
If the SBA believes a borrower may be ineligible for the loan or some forgiveness amount, it will require that the lender make a written request for additional information, and it may also request information directly from the borrower. Failure to respond to the request may result in a determination that the borrower is ineligible for forgiveness or the loan itself.
Per SBA guidance, shareholders, members, or partners of a borrower that is deemed ineligible to have received a PPP loan will not be protected by "the CARES Act's nonrecourse provision - which limits SBA's recourse against individual shareholders, members, or partners of a PPP borrower for nonpayment of a PPP loan only if the borrower is an eligible recipient of the loan."
Borrowers will be given the opportunity to seek reconsideration and appeal of certain SBA loan review decisions, but may not appeal decisions by their lenders directly. Appeals are heard by the SBA’s Office of Hearings and Appeals (OHA). Borrowers may appeal an SBA loan review decision that (1) a borrower was ineligible for a loan or loan amount, (2) a borrower used PPP funds for unauthorized purposes, (3) a borrower was ineligible for the forgiveness amount approved by the lender (whether the lender issued a full or partial approval), or (4) a borrower was ineligible for any forgiveness amount (i.e., the SBA concurs with a lender’s full denial decision).
A borrower may also seek review of a final SBA decision (i.e., a decision on the borrower’s appeal) in federal district court, but must first exhaust its administrative remedies, including by filing a request for review of the OHA’s to the SBA Administrator. Borrowers should carefully review with their attorneys to ensure that they comply with the procedural rules regarding PPP appeals, found here.

Businesses must be:

(a) an operating business,
(b) organized for profit,
(c) located in the United States,
(d) a small business under SBA size standards, including affiliates, and
(e) able to demonstrate a need for the desired credit

$1 million as loan or line of credit. This amount will revert to $500,000, as of October 1, 2021.

Additional details regarding the program are here. SBA does not have a specific Express Loan application currently up on its website.
Once applied, SBA will respond within 36 hours, at which point the borrower and SBA will work with an approved lender.

SBA guarantees 50% of the loan for loan amounts greater than $350,000, and guarantees 75% for loan amounts less than $350,000.
No collateral required for amounts up to $25,000.

Any allowable use for 7(a) loans including:

Working capital;
Expansion, renovation or construction;
Purchase of land, buildings or equipment;
Refinancing debt; inventory;
Start-up cost

Not forgivable.

Available in all 50 states, Puerto Rico, Guam, and the Northern Mariana Islands.
Must be in business as of January 31, 2020.
Available to:
1. Any small business according to SBA Size Regulations;
2. Private nonprofits*;
3. Agricultural cooperatives;
4. Any business concern, cooperative, ESOP, or tribal business concern, with not more than 500 employees;
5. Sole proprietors and independent contractors.
SBA affiliation rules apply.
Under the CARES Act, the usual requirement that the borrower demonstrate an inability to obtain credit elsewhere is waived.

*Note: per Disaster Loan applications, private nonprofits are eligible if it "is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the nonrevenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization"

$2 million;
$10,000 advance.

EIDLs are available through December 31, 2021.
More information about the program can be found here. Link to application included here.
Borrowers may be approved solely on the basis of their credit score and are not required to submit a tax return or tax return transcript for approval. Borrowers may also be approved through the use of "alternative appropriate methods" to determine an applicant's ability to repay.
A borrower must certify under penalty of perjury that it is an eligible entity to receive an advance.

Currently, 3.75%interest for small businesses and 2.75% for nonprofits.
Terms are determined on a case-by-case basis, based on the borrower's ability to repay.
Maximum term is 30 years.
No personal guarantee required for advances and loans of $200,000 or less.
Borrower can request a $10,000 advance that will be paid within twenty-one days of SBA's receipt of the loan application, if the SBA determines that the applicant is eligible for the loan.

Allowable uses:
- Fixed debts,
- Payroll,
- Accounts payable, and
- Other bills that can't be paid because of the impact of COVID-19.
EIDLs that were obtained prior to 4/3/2020 for a PPP-loan purpose (e.g., payroll costs, rent, utilities, interest on mortgage payments and other debt obligations) will affect a PPP loan.
It is unclear after 4/3/2020 whether and to what extent EIDLs taken out for PPP purposes can affect a borrower's PPP loan.
EIDL grant recipients may use the loans for expenses incurred or paid through December 31, 2020.

Borrowers are not required to repay an advance.
The SBNV Act repeals the requirement that EIDL advances be deducted from the amount of forgiveness for a PPP loan. The SBA will promulgate additional rulemaking to address how borrowers will be made whole for any deductions previously applied.
A borrower is otherwise required to repay the entirety of an EIDL.

Title I of the CARES Act appropriates $265 million for the carrying out of Section 1103, which permits the SBA to provide financial grants to small business resource partners, like Small Business Development Centers and Women's Business Centers, for education, training, and advising small businesses on accessing and applying for federal resources and business resiliency strategies to address the effects of COVID-19.
Section 1103 also authorizes the SBA to award grants to associations, or associations representing resource partners, to develop online platforms for small businesses to access information and resources provided by the federal government for small businesses regarding COVID-19, and to provide training and education for small businesses.

Section 1104 of the CARES Act allows for federal grant funds supporting the State Trade Expansion Program (STEP) in fiscal years 2018 and 2019 to remain available through the end of fiscal year 2021. STEP provides financial awards to state and territory governments to assist small businesses with export development. Awards are managed and provided at the local level by state government organizations and managed at the national level by the SBA's Office of International Trade. Eligible state entities can apply for STEP awards to be used to increase small business exporters and their sales in their state. A link to the SBA program can be found here. Specifics about STEP awards and the application process can vary state-by-state. See, e.g., California, New York, New Jersey, Texas.
Section 1104 also provides for reimbursement for financial losses relating to a foreign trade mission or a trade show exhibition that was cancelled solely due to the COVID-19 public health emergency, so long as the reimbursement does not exceed the amount received under the federal grant.

The SBA offers a few existing loan programs which may assist underserved or otherwise disadvantaged businesses, including the Community Advantage Program (application here), and Microloan Program (here: https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/microloan-program%20). Section 1112 of the CARES Act, as modified by the SBNV Act, provides a subsidy for borrowers under these programs, appropriating $17 billion and requiring the SBA to pay the principal, interest, and any associated fees for 3 months, 6 months, and 8 months depending upon the borrower and timing of the loan. The SBNV Act limits the maximum monthly payment for certain loans to $9,000, but extends the period of time to receive these benefits through September 30, 2021, and appropriates $3.5 billion for the carrying out of these new modifications to the subsidy program.
Congress also directed the SBA through the CARES Act to encourage lenders under these programs to provide payment deferments, when appropriate, and to extend the maturity of the loans to avoid balloon payments resulting from deferments provided by lenders during the period of the COVID-19 national emergency.

About MSC

CARES Act Title I Loan Programs Summary

CARES Act Title I Loans, as Modified by the SBNV Act

Paycheck Protection Program ("PPP")

Borrower Qualifications

Maximum Loan Amount

Important Information:

Application Process

Good Faith Certification:

Documentation:

Terms

Allowable Uses

Forgiveness?

Simplified Loan Forgiveness

General Loan Forgiveness

Other Forgiveness Details

Loan Forgiveness Documentation:

SBA Loan Review Process

SBA Express Loan (as modified by the CARES Act and SBNV Act)

Borrower Qualifications

Maximum Loan Amount

Application Process

Terms

Allowable Uses

Forgiveness?

SBA Economic Injury Disaster Loan (EIDL) Program (as modified by the CARES Act and SBNV Act)

Borrower Qualifications

Maximum Loan Amount

Application Process

Terms

Allowable Uses

Forgiveness?

Additional Information on Other CARES Act Title I Programs (as modified by the SBNV Act)

Section 1103: Entrepreneurial Development

Section 1104: State Trade Expansion Program

Section 1112: Subsidy for Certain Loan Payments

Sections