Small businesses are one of the main driving forces of the U.S. economy. According to the Small Businesses Administration, these businesses contribute as much as 44 percent of the U.S. economic activity. They also create the majority of new jobs across the country.
For these reasons, the government has many reasons to take care of the little guys. This support is why the government started the U.S. Small Business Administration (SBA). According to the SBA’s website, the agency’s job is to:
Ignite change and spark action so small businesses can confidently start, grow, expand, or recover.
It is a federal-level agency that aims to provide “counseling, capital, and contracting expertise” to small businesses to help them achieve that American dream. They provide these services through their offices and partner institutions accessible in every state.
Loans Offered By The US Small Business Administration
One of their key services is to provide companies with sources of funds to jumpstart their growth. Some of these lending programs include the Loan Guarantee Program, the Disaster Loan Program, and the Microloan program. These loans are as follows:
- Loan Guarantee Program: This program in itself is not directly about SBA offering loans to small businesses. Instead, it helps small businesses apply for loans from lending institutions with the SBA as their guarantors.
- Disaster Loan Program: This loan is for businesses that experienced economic or physical losses due to disasters that occurred in their region.
- Microloan Program: The SBA offers loans of up to $50,000 to small businesses and specific not-for-profit childcare centers. Beneficiaries can use their microloan for their working capital, inventory or supplies, furniture and fixtures, or machinery and equipment.
The SBA Payroll Protection Program
One of the SBA’s latest loan programs is the timely Payroll Protection Program under the CARES Act of 2020. The Payroll Protection Program or PPP, is a financial assistance program for small enterprises during the COVID-19 pandemic.
It aims to help businesses pay the salaries of their employees. One of its main objectives is to prevent a mass lay-off due to the shutdowns of various industries across the U.S. You can read more about the program and how you can avail it through this article.
The SBA has also provided details that may help you determine your eligibility for the program. This article, published by Jeff Drew on the Journal of Accountancy, explains the PPP’s basic details. Note, however, that some of the guidelines in this article may have been updated as the government is still figuring out the best way to offer it.
SBA issues details for Paycheck Protection Program loans
The U.S. Small Business Administration on Thursday issued an interim final rule for the Paycheck Protection Program (PPP), which is offering $349 billion in forgivable loans that small businesses impacted by the coronavirus pandemic can use to cover costs including payroll and rent.
The interim final rule lays out additional implementation guidelines and requirements for the PPP, which Congress created as part of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. Click here to read more…
If you want to learn more about the US SBA, our experts here at AldarisCPA are always ready to help you. We can also help you learn about the different programs the SBA offers that you can take advantage of. Contact us now by setting an appointment with our experienced CPAs.