New update for the SBA COVID-19 Disaster Recovery Loans

CARES Act (Coronavirus Aid, Relief, and Economic Security Act) as of 3/31/2020

Paycheck Protection Program (PPP) – Click HERE to contact us for an application

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis.

All loans will have the same terms regardless of the lender or borrower.

The loan amounts will be forgiven with the following conditions:

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made; and
  • Employee and compensation levels are maintained.

[Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to the likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.]

Loan payments will be deferred for 6 months.



In addition to the entities that are already eligible for SBA disaster loans (small businesses, private non-profits, and small agriculture cooperatives), eligibility is temporarily expanded to include:

  • Business entities with 500 or fewer employees**
  • Sole proprietorships, with or without employees
  • Self-employed individuals and Independent contractors
  • Cooperatives and employee-owned businesses
  • Tribal small businesses,
  • Private non-profits of any size, and Veteran organizations

**Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail).

When can I apply?  NOW!! Contact us here and we will immediately send you a checklist and application

  • Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lender representatives.
  • Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lender representatives.

How to apply:

           SBA does NOT process the Payment Protection Program applications directly through their website.    You may apply here through Stellar Business Funding as we are already actively starting building application files through our SBA lender network.  Contact us to start your application.


Economic Injury Disaster Loan (EIDL)

  • The SBA economic injury disaster loans (EIDL) can provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within 3 days of applying for an SBA Economic Injury Disaster Loan (EIDL).  To access the advance, you first apply for an EIDL and then request the advance.  The advance dis intended to retain employees and keep them on payroll, pay for sick leave, and pay for utilities, rent, and mortgage payments.  How to Apply for EIDL
    • EIDL requires you to apply online directly through the SBA site:  Click here to apply on the SBA site
    • When you apply, you can request an emergency grant of $10,000.
    • The SBA will provide the grant within 3 days of receiving your application.
    • You will not have to repay the grant, even if your application for a loan is denied.
    • If you apply for an EIDL and the grant, you can still apply for a Paycheck Protection loan.  However, the amount forgiven under a Paycheck Protection loan will be decreased by the $10,000 grant.


    ** The Paycheck Protection Program is implemented by the Small Business Administration with support from the Department of the Treasury.

SBA Loan Programs – The Small Business Administration seeks to solve small business cash flow problems by providing operating working capital small business loans to merchants of small and mid-sized businesses.

They also want to help start-ups, and promote commerce and enterprise in particular areas, occupations, industries. The SBA is a government agency and although we can help you get one of their loans, we are not affiliated or endorsed by them.

Initial Requirements

  • Business owners must be American citizens.
  • No previous or outstanding defaults on government-backed loans.
  • No tax liens or judgments filed any business, principal, or guarantor.
  • No delinquent taxes owed to the IRS.
  • No open litigation that could cause financial penalties.
  • You must have a detailed business plan.
  • Full documentation required with profit loss, and balance sheet.
  • 10% down payment or capital injection for purchases.

The main advantage of the SBA Loan Program is its low-interest rates. There are 2 SBA Loan Programs, the no-collateral Express Loan, and the collateralized 7(a) Loan.

SBA Express Loans

SBA Express Loans have terms of 2 – 10 years with variable interest rates of Prime + 4.75%. The application process takes 2 – 4 weeks and you will be required to meet several qualifications. No collateral is required.

SBA Express Loan Requirements

  • A 680 FICO credit score.
  • Be a current or past US military veteran or the spouse of one.
  • Located in an underutilized business zone.
  • Sell items that can be exported.
  • Sell items on your website that can be shipped to Canada, Mexico, or any other country.
  • Go to The Wall Street Journal for a link that shows the latest Prime Rate.

SBA 7(a) Loans

SBA 7(a) Loans have terms of up to 25 years with variable interest rates of Prime Rate + 2-3%. Because you will need to provide full personal and business documentation, and you’ll also need to fully collateralize with real estate and/or assets equal to your loan amount, the application process for this loan takes 2 – 6 months.

SBA 7(a) Loan requirements

  • You must be US citizens or registered aliens.
  • It must be a for-profit business.
  • The business mustn’t exceed SBA size standards.
  • Your business must not engage in lending, investing, gambling, or property speculation.
  • You must not be on probation or parole.

Although you don’t absolutely have to have real estate collateral, it is extremely difficult to get one of these loans without it.

And, there is no minimum FICO credit score requirement for 7(a) Loans, but know that you must have very good credit to qualify.

If you think you meet the requirements for either of these SBA Loans, Contact Us to apply …… we’d be happy to help you!