$10 Billion Increase in Available Disaster Relief Loans

In addition to the $349 billion Paycheck Protection Program (the “PPP”), the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) made $10 billion available to fund disaster relief loans and emergency grants under the Small Business Administration’s existing 7(b)(2) loan program (an “SBA 7(b)(2) loan”) and amended certain rules that apply to 7(b)(2) loans.

Traditionally, SBA 7(b)(2) loans were reserved for small business concerns, private nonprofit organizations, and small agricultural cooperatives located in a federally declared disaster area. However, from January 31, 2020 to December 31, 2020, the CARES Act adds the following entities to the list of eligible borrowers:

  • a business, cooperative, ESOP or tribal small business concern with not more than 500 employees; or
  • an individual that operates as a sole proprietorship (with or without employees) or as an independent contractor.

For information related to the Paycheck Protection Program, under the CARES Act, please visit "What You Need to Know to Understand the Payment Protection Program."

For further information related to disaster relief loans, or to further explore the impact of the coronavirus on your business, please contact your main Glaser Weil partner, or contact Glaser Weil’s COVID-19 Taskforce at covid19taskforce@glaserweil.com.

This article has been prepared by Glaser Weil LLP and is intended for informational purposes only. It is not legal advice and its transmission is not intended to create, and receipt by you shall not constitute, the creation of an attorney-client relationship. While we have attempted to provide information as accurately and timely as possible, it is not intended to be a full discussion of all aspects of the subject matter and applicable in all jurisdictions. It is not a substitute for legal advice from a qualified attorney licensed in the appropriate jurisdiction and with knowledge of your particular facts and objectives. Glaser Weil LLP expressly disclaims all liability with respect to actions taken or not taken based on the contents of this article and urges you to contact us or any other qualified attorney to discuss in greater detail your legal situation.