A Small Business Owner's Guide to Navigating SBA Coronavirus Relief
The coronavirus has led to unprecedented disruptions for small businesses. While these are challenging times, a variety of resources have become available to help small businesses navigate the crisis. Over the past few weeks, a group of Harvard MBA students and faculty been tracking resources as they become available, aggregating information about key resources (focusing on federal funding, but expanding to other areas as well), and gathering common questions from small businesses about which resources are available and how to access them. In this FAQ, we address the most commonly asked questions that we've come across, in the hopes of making it easier to access the aid you need. If you have a question that you don't see answered, or a resource that you think would be helpful for others, please fill out the FAQ Feedback Form. We will do our best to incorporate new questions into this document.
While it is reported that the PPP loan program ran out of funds as of April 16th, we still recommend applying for loans ASAP as more funding could become available and will be allocated on a first come first serve basis.
We have tried to address some of the common questions we’ve heard. We plan to update this page during the coming months as the situation evolves, and to include other resources as they emerge. While we have attempted to make sure this content is current and accurate, errors may remain.
FAQ for Paycheck Protection Program (PPP) Loans
FAQ for Economic Injury Disaster Loan (EIDL) Emergency Advance
| Program | Description | Features/Benefits | Take the PPP if you or your business... |
|---|---|---|---|
| Payroll Protection Program | - Loan can be 2.5x monthly average payroll costs (capped at $100,000 costs annualized per employee) - Loan terms include up to 6 month deferment, 2 year loan duration, 1% interest rate | - Can apply through any SBA qualified lender - Can be used for payroll costs, interest, rent, and utility (at least 75% of the loan amount must be spent on payroll costs) - No credit check, no personal guarantee, & non-recourse - Loan is completely forgivable if certain criteria are met | -Have significant payroll obligations (e.g. the service industry) -Want to take advantage of the loan forgiveness provision -Need a larger loan amount -Do not want to provide capital or a personal guarantee -Need to make use of affiliation exemptions |
| Economic Injury Disaster Loan | - Loan can be up to $2M at 3.75% (max 30 year term with 6 month deferment) - Up to $10K cash advance grant | - Quick and streamlined application process directly through the SBA, not required to apply through a bank - SBA is targeting to fund the grant within 3 days of application, though this is an ambitious goal. You will not need to repay the cash advance even if you are denied the loan. - Can be used to fund working capital needs | -Need a small cash infusion immediately ($10,000 emergency cash advance) -Need a smaller loan amount -Need greater flexibility for the use of the funds |
This guide was prepared by Will Chavey (MBA '21), Merve Ciplak (MBA '21), Billy Clemons (MBA '21), Amanda Durham (MBA '21), Andy Harris (MBA '20), Shinrei Kamei (MBA '21), Ali Kokot (MBA '21), and David Roos (MBA '20) working with Professors Zoe Cullen, Ed Glaeser, Michael Luca, and Chris Stanton.