CARES Act Expands Loans Programs

April 2, 2020

By: Eric N. Fischer, Naomi Smith

When the President signed the Coronavirus Aid, Relief and Economic Security Act of 2020, some key loan and funding options for small businesses were expanded or changed.


SBA Express Loans


The CARES Act expanded the SBA 7(a) Express Program maximum loan amount from $350,000 to $1,000,000.



Economic Injury Disaster Loans


Under the CARES Act, for Economic Injury Disaster Loans resulting from the COVID-19 emergency, the following are waived:


  • the requirement of personal guarantees for loans up to $200,000;
  • the requirement that the applicant must be in business for a year (but must be in operation on January 31, 2020);
  • the credit elsewhere test; and
  • for loans that close prior to December 31, 2020, the requirement that the applicant provide the lender with tax returns - the lender may approve based solely on the applicant’s credit score or other appropriate methods establishing the borrower’s ability to pay.



Emergency EIDL Grants


Businesses submitting an application for an EIDL between January 31, 2020 and December 21, 2020 may request an advance of up to $10,000 within 3 days after the SBA receives the application, subject to verification that the applicable is eligible to receive an EIDL and has been in operation since January 21, 2020.





Subsidy for Certain SBA Loan Payments


The CARES Act provides some relief to borrowers who have received other SBA loans prior to the enactment of the Act. For Section 7(a) SBA loans, and for loans made by an intermediary using §7(m) loans or grants, the SBA shall pay the principal, interest, and fees owed for loans in regular servicing status for any such loans, whether on deferment or not, for a 6-month period.  This payment is made automatically, with no additional action required of borrowers. This does not apply to Payroll Protection Program loans or EIDLs which have separate subsidy and repayment requirements.



Additional CARES Act Coverage