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Posted on: March 15, 2021

03/15/21: SBA Update-American Rescue Plan Elevates Support to Small Businesses

Trumbull Economic Development

SBA Extends Deferment Period for all COVID-19 EIDL and Other Disaster Loans until 2022

The U.S. Small Business Administration announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program, until 2022.

  • All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note.
  • All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.

Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.

Small Businesses, private nonprofits and agricultural enterprises, including those self-employed individuals, contractors and gig workers, continue to navigate a very difficult economic environment due to the continued impacts of the Coronavirus COVID-19 pandemic, as well as historic Severe Winter Storms in 2020,” SBA Administrator Tami Perrillo said.

“The COVID-19 EIDL program has assisted over 3.7 million of small businesses, including non-profit organizations, sole proprietors and independent contractors, from a wide array of industries and business sectors, through this challenging time,” continued Perrillo.

SBA continues to strive to make available all previously approved Coronavirus Pandemic stimulus funding and administer the new targeted programs related to provisions in the 2020 Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the Economic Aid Act) as quickly as possible.

“The American people and the nation’s Small Business owners need our tireless effort and dedication to get this essential funding to those in great need, and SBA will not rest until we implement President Biden’s “American Rescue Plan” and its’ additional targeted programs and funds allocated for America’s small business and nonprofit communities,” said SBA Senior Advisor Michael Roth .

COVID-19 EIDL loans are offered at very affordable terms, with a 3.75% interest rate for small businesses and 2.75% interest rate for nonprofit organizations, a 30-year maturity. Interest continues to accrue during the deferment period and borrowers may make full or partial payments if they choose.

In mid-February 2021, SBA reached a milestone in the success of the COVID-19 EIDL program, by approving over $200 billion in emergency funding in low-interest loans, providing working capital funds to small businesses, non-profits and agricultural businesses to survive the severe impacts of this catastrophic and historic period within the entire United States of America and its territories. SBA continues to approve over $500 million each week for the COVID-19 EIDL program.

Questions on SBA COVID-19 EIDL and disaster loan payments can be answered by email at DisasterCustomerService@sba.gov or by calling SBA’s Customer Service Center at 1-800-659-2955 (TTY: 1-800-877-8339). 

Paycheck Protection Program (PPP)

The Paycheck Protection Program (PPP) provides loans to help businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. Borrowers may be eligible for PPP loan forgiveness. SBA is currently offering PPP loans until March 31, 2021. President Biden recently announced program changes to make access to PPP loans more equitable.

The SBA has published its newest Paycheck Protection Program Report, with approvals as of March 7, 2021. In Connecticut there have been over 27,295 guaranteed loan approvals totaling $2,213,808,450

For the newest round of PPP funding, which began on January 11, 2021, SBA has guaranteed over 2.4 million PPP loans for more than $156.2 billion have been guaranteed by SBA after submission from 5,185 participating lenders. This represents an over 200,000 increase in guarantees since last week, with an almost $9 billion increase in net dollars approved during the same time frame. 

For Schedule C Filers Only how PPP loans are calculated:

For First and Second Draw PPP Schedule C filers using gross income loans are calculated using the average monthly cost of the salaries of you and your employees. If you’re a sole proprietor or self-employed and file a Schedule C, your PPP loan is calculated based on your business’ gross profit (or gross income).

Your salary as an owner is defined by the way your business is taxed. If you are taxed as an LLC, your salary is directly linked to your business’ profit, and is the amount you paid self-employment tax on in 2019 or 2020. If you are taxed as a corporation, your salary is dependent on running payroll for yourself—meaning you must be remitting federal and state payroll taxes. Corporations paying owners through owner draws won’t qualify for the PPP.

Whether you are applying for your first or second PPP loan, having your P&L statements reviewed by an SBA Resource Partner will show your net profit and/or payroll expenses to determine the PPP loan amount you are eligible for. Reach out to any one of our partners today, ctsbdc.com,Womens Business Development Council,SCORE or the www.wbc/ec make an appointment today! 

Shuttered Venue Operators (SVO) Program

Are you a theatrical producer, talent representative, venue promoter or do you operate a live venue, live performing arts organization, movie house or cultural institution and have been impacted by COVID-19?

The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the SBA’s Office of Disaster Assistance.

Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.

Get introductory information about the grants, who can apply, how potential organizations can prepare, and additional details re: eligibility and applications.

Click here to learn:

✅Specifics about the grants

✅Who is eligible

✅ How to prepare to apply

SBA is in the process of setting up the grant program and is not yet accepting applications. SBA has added dedicated e-news updates for the Shuttered Venue Operators Grant. To get notified quickly about program changes and announcements, sign up below--even if you have registered earlier for other SBA newsletters.

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