The Small Business Task Force unveils a $300B in Emergency Coronavirus Relief Package as part of the Keeping Workers Paid and Employed Act, Division A of the Coronavirus Aid, Relief, and Economic Security Act, includes:
– $300 billion in lending authority for SBA 7(a) loans
– 100% government-guarantees on SBA relief loans made through 12/31/20
– Up to $10MM in loan size, calculated by taking the average total monthly payments by the applicant for payroll, mortgage payments, rent payments, and payments on any other debt obligations incurred during the one-year period before the date on which the loan is made (except for applicants with seasonal employees, in which the payroll is based on the average total monthly payments for payroll from 3/1/19 through 6/30/19)
– Loan proceeds are only for payroll support including medical leave, costs related to health benefits, employee salaries, mortgage payments, rent, utilities, and any other debt payments incurred before the covered period. (These relief loans are not eligible for business acquisitions, real estate purchases, or other typical 7(a) loan proceeds).
– Available for currently eligible SBA borrowers AND not-for-profits
– Delegated (underwriting) authority will be made for SBA participating lenders to expedite loan processing
– Borrowers can get the SBA 7(a) loan OR an EIDL (direct SBA disaster loan), not both
– Borrower and lender guarantee fees will be waived
– Provides a “process” by which borrowers will be eligible for loan forgiveness in an amount equal to their payroll cost and costs related to debt obligations for the period between 3/1/20 and 6/30/20. The amount of forgiveness will be reduced proportionally by the number of employees laid off during this time, excluding employees making in excess of $100k in this calculation
– Lenders must verify payroll costs
– MORE details will be released in the hours/days ahead
While this has not yet been passed by Congress, these provisions will be in the final legislation and on its way to the president’s desk TODAY. We expect it to be signed in to law imminently.
We will update you with all the new information that is likely to come in the following hours/days. We will continue to help shape the rollout of the new rules/regs of this unprecedented legislation.
The Fountainhead team has been mobilizing for the past week, is healthy, and is mostly working remote. We are deeply honored to be a participating SBA lender during this most extraordinary time and look forward to being on the frontlines in this massive effort to save America’s small to mid-sized businesses.
We humbly urge you to act now by visiting fountainheadcc.com/apply-relief-loan to get in our 7(a) loan queue ASAP. We are processing loans in a first-come, first-serve order. The sooner we receive your submission the quicker we’ll be able to process your loan.
May you and yours stay safe, healthy, and optimistic.