COVID-19: Summary of Several Available Loan Programs

 

Covid-19 Small Business Administration and New York State

Summary of Several Available Loan Programs

  1. Economic Injury Disaster Loan (EIDL) – This program is currently only accepting applications from agricultural businesses but is expected to open again soon. Applications are completed directly with the SBA. Originally, this was supposed to be a loan of up to $2 million but due to the high demand, they have limited it to $150,000 per applicant. This is a 30-year term loan with a 3.75% interest rate. There is also a grant portion of this loan that is available. You can receive up to $10,000 as a grant ($1,000 per employee). The grant portion does not need to be paid back; however, if you received a PPP loan. it will reduce the amount of forgiveness. Personal guarantees are not required for all loans less than $200,000 although collateral is required for any loans over $25,000. To be eligible for the EIDL loan, you must be considered a small business with fewer than 500 employees (some businesses with more than 500 employees can also qualify, contingent upon SBA’s size standards for the industry).

 

  1. Main Street Lending Program – Applications are completed through FDIC-insured lenders. Businesses that have fewer than 15,000 employees or less than $5 billion in total revenues in 2019 qualify for this program. Certain industries such as non-profits, financial businesses, life insurance companies, passive businesses owned by developers and landlords, etc. do not qualify. This program includes 3 different loan options:
    1. Main Street New Loan Facility (MSNLF) – This loan has a 4-year maturity. Principal and interest payments are deferred one year. The interest rate is the 1- or 3-month adjustable LIBOR rate plus 300 basis points. The principal is amortized one-third in the second year, one-third in the third year, and one-third in the fourth year. The minimum loan size is $500,000.
    2. Main Street Priority Loan Facility (MSPLF) – This loan has a 4-year maturity. Principal and interest payments are deferred one year. The interest rate is the 1- or 3-month adjustable LIBOR rate plus 300 basis points. The principal is amortized 15% at the end of the second year, 15% at the end of the third year, and a balloon payment of 70% at the end of the fourth year. The minimum loan size is $500,000.
    3. Main Street Expanded Loan Facility (MSELF) – This loan has a 4-year maturity. Principal and interest payments are deferred one year. The interest rate is the 1- or 3-month adjustable LIBOR rate plus 300 basis points. The principal is amortized 15% at the end of the second year, 15% at the end of the third year, and a balloon payment of 70% at the end of the fourth year. The minimum loan size is $10 million.

 

  1. New York Forward Loan Fund (NYFLF) – This is a loan available to New York small businesses with 20 or fewer full-time equivalent employees and less than $3 million per year of gross revenues. There is no restriction on what industries can apply for this loan. Applications for these loans are completed directly through New York State. Companies that received either PPP or EIDL loans are not eligible. The loan amount is the lesser of $100,000 or the average monthly revenues in a 3-month period prior to COVID-19. This loan would need to be paid back over 5 years. The interest rate on these loans is 3%. Only interest payments are required for the first year and the loan balance is amortized over the remaining 4 years. No collateral or personal guarantees are required.