Spring Bank will be able to offer Small Business Administration (SBA) 7(a) loans through the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act. As an SBA Preferred Lender with delegated authority to make 7(a) loans, the bank will be able to offer loans offered through the Paycheck Protection Program provision of the CARES Act.
Here are key points of the program:
- All eligible businesses and nonprofits in operation on or before February 15, 2020 with fewer than 500 employees are eligible
- Loan proceeds may be used to maintain payroll, rent, business related debt costs.
- Loan amounts are the lesser of average monthly payroll during the last 12 months x 2.5 or $10MM
- The portion of the loan that is used for eligible purposes during the first eight (8) weeks after funding is eligible for forgiveness
- No SBA guarantee fees
- No personal guarantee
- No collateral requirement
These loans are intended to assist struggling small businesses across the country. The money can be used for payroll, rent, utility or mortgage expenses as well as interest costs on other debt obligations incurred before February 15, 2020. As more details are available, Spring Bank will be updating their website. For more details from the SBA please go to: Coronavirus (COVID-19): Small Business Guidance & Loan Resources.