An Overview and Comparison of SBA Loans Through CARES

Small Business Center information that compares loans from the Federal CARES act

This information comes to us from the SBA and compares the relief loans available to small businesses as well as giving business owners the details of next steps to take.

SBA Emergency Loans

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, allocates $349 billion to help small businesses keep workers employed amid the current circumstances they are encountering. The CARES Act provides funding for the Paycheck Protection Program, modifies the existing Emergency Injury Disaster Loan (EIDL) program and provides immediate loan payment relief for current SBA 7(a) borrowers. The following is an overview of the key components of and eligibility requirements of these programs:

7(a) Loan Payment Relief

SBA will pay the principal, interest, and any associated fees owed on 7(a) loans as follows:

  • Existing borrower not on deferment: six months beginning with the next payment due on the loan;
  • Existing borrower on deferment: six months of payments beginning with the next payment due on the loan after the deferment period; and
  • New borrower: six months of payments beginning with the first payment due on the loan, but only for new loans made within the first six months starting from the date of enactment (3/27/2020).

Economic Injury Disaster Loan (EIDL)

Eligibility: Businesses with 500 employees or fewer.

  • Up to $2 million can be provided to help meet financial obligations and operating expenses that could have been met if the disaster did not occur.
  • Loans can be made based solely on credit scores.
  • The interest rate on EIDLs will be 3.75% interest rate for small businesses.
  • The first twelve payments will be deferred and not become due until one year after the original disbursement. Interest does accrue during this time.
  • The term of these loans will be up to 30 years.

Economic Injury Disaster Loan (EIDL) Advance

  • For those that apply for the Economic Injury Disaster Loan (EIDL), an advance of up to $10,000 will be provided to small businesses within several days of applying for the loan.
  • The advance does not need to be repaid, even if the grantee is subsequently denied an EIDL.
  • Funds can be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
  • Eligibility: Advances are available to small businesses, sole proprietors, independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses in operation on January 31, 2020.

Small Business “Paycheck Protection Program” (PPP)

  • A new $349 billion lending program under the existing SBA 7(a) program. The SBA guarantee of PPP loans will be 100% through the end of 2020. PPP loan payments will be deferred for a minimum of six and up to 12 months. Loans will be administered through local and regional banks; any federally regulated bank may become an SBA lender for this purpose. The Department of the Treasury will issue regulations for these loans quickly.
  • The interest rate will not exceed 4%. Rate is currently fixed at 0.5%.


  • Small businesses as defined by SBA size standards, generally up to 500 employees, but up to 1,500 employees depending on the sector as certain sectors are based on revenue.
  • Sole proprietors, the self-employed, and independent contractors.
  • Regulatory Streamlining:
  • SBA’s standard “no credit elsewhere” test is waived.
  • No personal guarantee or collateral required.
  • No additional fees will be applied to these loans.
  • Size of loans: Up to $10 million. Loan amount is based on recent payroll costs, compensation paid to individuals, including the self-employed. Compensation in excess of $100,000 a year to any individual is excluded.


  • The business must certify the loan will be used to retain workers, maintain payroll, make mortgage or lease payments, and pay utilities.
  • Loans may be forgiven, up to an amount equaling eligible payroll, mortgage interest, rent and utility cost, incurred during the 8 week period starting from loan origination. Compensation in excess of $100,000 a year to any individual will not qualify for forgiveness.
  • Loan forgiveness is reduced by layoffs or pay reductions in excess of 25%.
  • Loan forgiveness is not treated as taxable income.

Next Steps

  • Review your options as listed in this document.
  • Contact your local SBTDC office to speak with a business counselor. There are 16 offices located throughout North Carolina, serving every county. During this time, counselors are available via phone, email or video-conference only.
  • Your business counselor will be available to help you navigate the application process, develop a continuity plan, and answer your questions.

Find Your Local Office

  • With a lead center located in Raleigh, NC, the SBTDC operates 10 regional centers in 15 total offices and six specialty programs.
  • Find your local regional center using the map in the file below and use contact information there to reach out to a counselor today.
Finding an SBA office to discuss loan options through CARES program

COVID-19 Resources

The novel coronavirus has affected small businesses from the mountains to the coast. Visit the SBTDC’s partner website to get the latest information, news and resources to help you weather the crisis.


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