Coronavirus Aid, Relief, and Economic Security (CARES) Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses.

Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals prepare to file for a loan.


SBA Disaster/EIDL Loan Information

As of May 18, 2020, the federal government has added additional funds to the SBA EIDL (Economic Injury Disaster Loan) Program, however, applications are only being accepted for agricultural businesses.

If you have already applied for an EIDL Loan or Advanced Grant but have not received funds, follow up with the SBA Hotline at: 1-800-659-2955.

If you were unable to apply for the first round of funding and are ineligible for the second round, please watch the SBA website for updates. It is likely the same rules will apply to any future rounds of funding as are listed in the FAQ section below.

SBA EIDL Loan FAQ

  • Applicants must meet the SBA requirements of a small business (500 employees or fewer)
  • Businesses directly affected by COVID-19 Businesses that offer services directly related to the businesses in the declaration
  • Other businesses indirectly related the industry that are likely to be harmed by losses in their community (Example: Manufacturer of widgets may be eligible as well as the wholesaler and retailer of the product)

  • Agricultural Enterprises:  If the primary activity of the business (including its affiliates) is as defined in Section 18(b)(1) of the Small Business Act, neither the business nor its affiliates are eligible for EIDL assistance.
  • Religious Organizations
  • Charitable Organizations
  • Gambling Concerns (Ex: Concerns that derive more that 1/3 of their annual gross revenue from legal gambling activities)
  • Casinos & Racetracks (Ex: Businesses whose purpose for being is gambling (e.g., casinos, racetracks, poker parlors, etc.) are not eligible for EIDL assistance regardless of 1/3 criteria above.
  • Cannabis Industry

  • Credit History: Applicants must have a credit history acceptable to the SBA
  • Repayment: SBA must determine that the applicant business has the ability to repay the SBA loan.
  • Eligibility: The applicant business must be physically located in a declared county and suffered working capital losses due to the declared disaster, not due to a downturn in the economy or other reasons.

  • Eligible entities may qualify for loans up to $2 million.
  • The interest rates for this disaster are 3.75 percent for small businesses and 2.75 percent for nonprofit organizations with terms up to 30 years.
  • Eligibility for these working capital loans are based on the size (must be a small business) and type of business and its financial resources.

These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or for expansion. Funds cannot be used to pay down long-term debt.

  • Completed SBA loan application (SBA Form 5).
  • Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
  • Complete copies of the most recent Federal Income Tax Return.
  • Schedule of Liabilities (SBA Form 2202).
  • Personal Financial Statement (SBA Form 413).
  • Income, balance sheet, and cash flow documents.
  • Other Information may also be requested.

  • Complete copy, including all schedules, of the most recent Federal income tax return for principals, general partners or managing members, and affiliates (see filing requirements for more information)
  • If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year
  • A current year-to-date profit-and-loss statement
  • Additional Filing Requirements (SBA Form 1368) providing monthly sales figures (This is especially important for Economic Injury Disaster Loans)

  • Small businesses that submit complete loan packages could receive the money within three (3) weeks
  • Incomplete information and verification of collateral will delay the approval process

  • Include the specific disaster in your application – specifically reference “COVID-19” or Coronavirus
  • Apply online vs by mail (Applying online is best)
  • Write your password down; neither the system nor any personnel are able to retrieve it
  • Save your work at every prompt
  • Do not rush through the application. Check and recheck the filing requirements to ensure that all the needed information is submitted. The biggest reason for delays in processing is due to missing information.
  • Make sure to complete all filing requirements before submitting the application and forms
  • Be sure to use the same contact information (business name and the name of all owners) that you use on your federal tax returns. Double-check that they match
  • If your tax returns reference other businesses that you own, you must also submit those tax returns in order to avoid processing delays
  • If more funds are needed, applicants can submit supporting documents and a request for an increase. If fewer funds are needed, applicants can request a reduction in the loan amount.
  • If the loan request is denied, the applicant will be given up to six months in which to provide new information and submit a written request for reconsideration
  • As you consider applying for the different federal funding sources available for Colorado businesses, the following information can help you make the best choices for your situation:
  1. Federal funds carry program-specific restrictions and it’s important to know and protect your options. Review each program thoroughly. Your approval and acceptance of a loan from one federal program may cause you to be fully or partially ineligible for other sources of federal funding.
  2. Different federal funding such as loans and grants from multiple agencies will roll out at different times, so it’s important to consider the timing of the funding source.
  3. Federal economic disaster recovery loans are accessible right now for qualified businesses; however, no federal economic disaster recovery grants have been announced. Unfortunately, for businesses seeking immediate help, there is no way to predict which future federal tools – including grants – may be employed as COVID continues to impact the US economy. This can place businesses in the challenging position of weighing an immediate federal tool against the possibility of future programs that may or may not be offered, with requirements yet to be determined.

We are committed to sharing news of all new economic recovery resources (both state and federal) as they become available and are here to be your guide through this challenging time.

  • All Colorado counties are represented as being located in a certified disaster declaration area. Currently the site is struggling with the traffic load. We would encourage anyone who can to access the site after peak hours (7pm to 7am MST).

  • Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at https://disasterloan.sba.gov/ela
  • Paper loan applications can be downloaded from www.sba.gov/disaster. Completed applications should be mailed to:
    U.S. Small Business Administration
    Processing and Disbursement Center
    14925 Kingsport Road
    Fort Worth, TX 76155
  • Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov.


SBA EIDL Application


PPP Loans / Colorado SBA Lenders

SBA 7(a) banks are going to handle the new Payroll Protection Plan (PPP) loans. If you have a banker, we recommend you clarify if they are a 7(a) lender, or have plans to become one. Click the link HERE for a list of Colorado 7(a) lenders.

For more information on the Paycheck Protection Program
An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.  Click HERE


EIDL and PPP Frequently Asked Questions

Borrowers can apply for both an SBA Economic Injury Disaster Loan and the Paycheck Protection Program loan.
However, the Paycheck Protection Program loan funds and the Economic Injury Disaster Loan funds cannot be used for the same purpose. The Paycheck Protection Program loan must be used for payroll (minimum of 75% of the funds received) for it to be eligible for a forgivable loan and the remaining is used for different purposes. Borrowers who accept both loan funds should document the uses of the funds appropriately.

Yes, you are still eligible to apply for the Paycheck Protection Program even if you applied for or received an SBA Economic Injury Disaster Loan.
If your Economic Injury Disaster Loan was not used for payroll costs, it does not affect your eligibility for a Paycheck Protection Program loan.
If your Economic Injury Disaster Loan was used for payroll costs, your Paycheck Protection Program loan must be used to refinance your Economic Injury Disaster Loan. The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years. Economic Injury Disaster Loan assistance provides up to $2 million loan per business and are long-term, low-interest rate at 3.75% for businesses and 2.75% for non-profits and a maturity of up to 30 years.
Any advance up to $10,000 on the Economic Injury Disaster Loan will be deducted from the loan forgiveness amount of the Paycheck Protection Program loan.
For example, a borrower may obtain a loan from the Paycheck Protection Program and use those funds to pay for 8 weeks of payroll or employee retention. They may wish to then dedicate their entire EIDL funds towards working capital, notes payable and accounts payable that do not duplicate the funds provided through the Paycheck Protection Program. If the EIDL loan was used for payroll expenses, the borrower must refinance the EIDL loan with the PPP loan which carries a lower interest rate as well as a shorter maturity period.
Select the loan program that best meets your individual business needs; however, you are not permitted to hold funds from both programs for the same purpose.
The PPP loan has different terms from the EIDL loan. The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years.
Economic Injury Disaster Loan assistance provides up to $2 million loan per business and are long-term, low-interest rate at 3.75% for businesses and 2.75% for non-profits and a maturity of up to 30 years.
The application period for PPP loans runs through June 30, 2020, but the EIDL application period runs through December 2020. If you have working capital need beyond what is provided by PPP, you can apply for additional assistance through the EIDL program.
If you are applying for both, you can accept PPP first – then decide whether to close on your EIDL approved loan. An EIDL approved loan may be closed within 60 days, and the borrower can choose whether to close on the loan. The EIDL application period runs through Dec. 2020.

Express Bridge Loan (EBL) Pilot Program

Express Bridge Loan (EBL) Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork.

EBL loans can only be made by SBA Express Lenders that had a valid Supplemental Loan Guaranty Agreement SBA Express Program (SBA Form 2424) in effect as of the date of the applicable disaster.

Eligible small businesses are those that were located, as of the date of the applicable disaster, in the Primary Counties that have been Presidentially-declared as disaster areas, plus any Contiguous Counties. The small business must have been operational when the declared disaster commenced, and must meet all other 7(a) loan eligibility requirements.

Terms:

    • Up to $25,000
    • Fast turnaround
    • Will be repaid in full or in part by proceeds from the EIDL loan

Find an Express Bridge Loan Lender via SBA’s Lender Match Tool or by connecting with your local SBA District Office.

List of SBA Express Lenders in Colorado:


Microlenders

Colorado’s mission-based lenders have been lending to traditionally-unbankable clients for over 30 years.  They are open for business and lending, continuing to be a real resource for small business and entrepreneurs!


Larimer County Small Business Relief and Recovery Loan Fund


A new $5 million Larimer County Small Business Recovery Loan Fund is now accepting applications. Colorado Enterprise Fund (CEF) will manage the fund, which includes $2 million in lending capital with initial lending capital provided by Bohemian Foundation. Additional funds will become available with the remaining $3 million in lending capital to be raised through regional collaboration with local foundations, banks, municipalities, private businesses and individuals.

Loan details are as follows:

  • Loans amounts between $2,500-$50,000 at a fixed rate of 3.50% and no origination fee; and
  • Loans are intended to support the stabilization and recovery of businesses.

Eligible Business will (in addition to other requirements):

  • Be located within Larimer County, Colorado (primary address) and employ 20 or fewer workers.
  • And has through normal operations held sufficient human, intellectual, and financial capital to be deemed economically viable prior to March 15, 2020.

Read More About the Program


Alternative Funding Sources

The following Google sheet helps Colorado’s small businesses find alternative funding sources beyond EIDL, PPP, and other federal loans and programs. OEDIT will be updating this sheet regularly and are aware that resources can change on a day-to-day basis. If you come across any resources that are no longer active, please email oedit_sbnavigator@state.co.us.

Please note that this Google sheet is ‘live’, so you may see changes as OEDIT makes real-time updates.

Alternate Funding Resources

SBA Disaster Loan Link

SBA Disaster Loans & Financing

Get started with an SBA Disaster Loan and other business financing information including microlenders and grants

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