The CARES Act - SBA 7(a) Loans

Please note that this is not intended to be a full summary of the CARES Act.  Instead, I have reviewed those portions of the CARES Act that I thought would be most important to our clients and our network.  However, intentionally omitted are discussions on the amount of relief that will be paid to individuals and families, as others have adequately covered and summarized such topics.  See for example here, where you can calculate what you (as an individual taxpayer) will receive (if anything).

Analysis is focused on the SBA 7(a) Loans. There are two types of SBA Loans that you may be hearing about: (1) the Economic Injury Disaster Loan (EIDL) and (2) the Section 7(a) Loans. Both have different application processes. There were only certain parts of EIDL that was amended as part of the CARES Act.  The primary changes were made to the 7(a) Loans.

EIDL loan terms have some differences from 7(a) loans (including a lower interest rate (2.75% to 3.75%, a longer term (up to 30 years)). For more information on EIDL loans (or to apply) go here.

Below is a summary of the major terms and answers to the questions that you may have about the SBA 7(a) Loans under the CARES Act.  There are certainly more nuances, but below is an attempt to put these concepts in plain English for a basic understanding.

7aLoanChart.jpg

ADDITIONAL INFORMATION 

If you’re considering a 7(a) Loan, we recommend that you start with an SBA lender at your current bank.  If you’d like a referral to a trusted SBA Lender, please let us know and we can help you get connected.