The CARES Act injected billions of dollars in funding for loans provided by the Small Business Administration. SBA’s coronavirus relief options include the Paycheck Protection Program, which the administration will forgive if employers retain employees using the funds provided, and the Economic Injury Disaster Loan, which offers recipients more flexibility as far as how they apply the funds toward capital expenses. We got clarification on the options available from Shivani Dubey, deputy district director of the SBA’s Arizona district office.
“In Arizona, we’ve got 72,000 businesses that have received the PPP loan. And that’s to the tune of $8.5 billion,” Dubey said. “Nationally, we still have about $100 billion in funding left.”
Recent reports have underscored concerns from business owners who worry they may have to violate the forgiveness terms granted through PPP loans in order to cover more pressing expenses. Dubey said the program’s stipulations have not changed and urged applicants to be aware of all of the conditions they sign up for beforehand.
“If the forgiveness part doesn’t happen, it turns into a 1% loan and you have two years to pay that back,” Dubey said. “If you put in 10 employees to get that PPP loan, then you’ve hired back 10 employees to keep the forgiveness model clean.”
Dubey said the administration typically defines small businesses as employers that have 500 workers or fewer, but there are variances to that rule.