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These are the standard disaster assistance loans and very different from the new CARES part of the stimulus bill which was just signed into law. This will be a

These are the standard disaster assistance loans and very different from the new CARES part of the stimulus bill which was just signed into law. This will be a new loan program to give 2.5x the average monthly payroll costs over the last year, and can be forgiven if the company doesn't lay off anyone. Good overview: https://www.venable.com/insights/publications/2020/03/the-cares-act-what-you-need-to-know-about https://www.venable.com/insights/publications/2020/03/the-ca...

danielfoster 7y ago
This is a good option for startups as well. Keep in mind that the disaster loans also have new benefits approved today (no personal guarantee up to $200k, approval based on current credit score only, and more). It might make senses for startups to wait a few days and weigh each program. For very small teams, freelancers and sole proprietors, the disaster loans win out for its easier underwriting and approval process-- there is no need to go through a bank. But if I had a large team I would go with this option.
Saaster 7y ago
So you can get the loan to cover up 2.5x monthly payroll, use that to pay your employees for 8 weeks, then the loan is forgiven? Is there any reason a software company < 500 people wouldn't want to or couldn't take advantage of that?
- manigandham 7y ago
  If you can use it then you should. However startups that have investors that own a major share in multiple companies might have a problem because employees at all of those companies can be counted together and cross over the 500 limit. The "affiliation guide" specifies what counts as a small business and prevents a single organization from creating many smaller companies to get SBA benefits. I'm not sure if it changed for these new benefits. Here is the guide: https://www.sba.gov/document/support--affiliation-guide-size-standards https://www.sba.gov/document/support--affiliation-guide-size...
hmahncke 7y ago
Should just submit the venable.com link as a new submission, it's a much more directly relevant overview of the immediate news on this type of loan.

danielfoster 7y ago

This is a good option for startups as well. Keep in mind that the disaster loans also have new benefits approved today (no personal guarantee up to $200k, approval based on current credit score only, and more). It might make senses for startups to wait a few days and weigh each program. For very small teams, freelancers and sole proprietors, the disaster loans win out for its easier underwriting and approval process-- there is no need to go through a bank. But if I had a large team I would go with this option.

Saaster 7y ago

So you can get the loan to cover up 2.5x monthly payroll, use that to pay your employees for 8 weeks, then the loan is forgiven? Is there any reason a software company < 500 people wouldn't want to or couldn't take advantage of that?

manigandham 7y ago
If you can use it then you should. However startups that have investors that own a major share in multiple companies might have a problem because employees at all of those companies can be counted together and cross over the 500 limit. The "affiliation guide" specifies what counts as a small business and prevents a single organization from creating many smaller companies to get SBA benefits. I'm not sure if it changed for these new benefits. Here is the guide: https://www.sba.gov/document/support--affiliation-guide-size-standards https://www.sba.gov/document/support--affiliation-guide-size...

hmahncke 7y ago

Should just submit the venable.com link as a new submission, it's a much more directly relevant overview of the immediate news on this type of loan.