Business Financing to Start and Grow

Typically a loan for purchasing a business is 10 to 15 years. Loans for equipment and working capital tend to be between five and ten years.

The SBA will guarantee a loan offered by the lender such that the lender does not have to assume full risk for it. Depending on the promise of the business, the robustness of the business plan, and the quality of the cash flow projections, the SBA can assume risk up to ninety percent of the loan. The advantage to the lender is that it then does not have to assume full risk. The SBA is NOT a bank or direct lender. Rather, it is a partial guarantor on the note.

Hardship Accommodation Plan

SBA offers a Hardship Accommodation Plan (HAP) for COVID-19 EIDL borrowers experiencing short-term financial challenges. Borrowers eligible for this plan may pay 10% of their usual payments for six months, without first catching up on missed payments. Borrowers will have the option to renew after the plan concludes. Interest will continue to accrue, which may increase (or create) a balloon payment due at the end of the loan term. Apply for HAP through the MySBA Loan Portal. 

Eligibility

All loans in repayment, including past-due loans, are eligible. You're also eligible if your loan defaults (more than 120 days late on a payment) as long as it hasn't been sent to the Treasury for extra collection steps. This generally occurs after you are 180 days late on a payment. Once the Treasury takes extra collection steps, your loan is no longer eligible, and you must work with the Treasury on any further steps. If your loan was already sent to the Treasury, you'll need to make payments directly to them.  

Terms

• Borrowers are required to pay a fixed percentage of their monthly payment amount. Payment reduction will vary based on past enrollment status.
• During the Hardship Accommodation period, borrowers can voluntarily make larger payments.
• The regular monthly payment amount will resume and be required after the six-month Hardship Accommodation period ends. Borrowers may be able to renew the Hardship Accommodation Plan, if necessary. The terms may vary for renewals.
• It's important to keep up your payments. If you choose this help plan but miss payments, your loan will be considered in default again. There are serious consequences for defaulting on government debt. SBA recommends enrolling in autopay to avoid missing a payment.

Enrollment

Borrowers are eligible to enroll in the Hardship Accommodation Plan beginning 60 calendar days before their first payment due date. 

If your loan amount is less than or equal to $200,000:  

• First-time enrollment: To enroll in the Hardship Accommodation plan, create an account or log in to the MySBA Loan Portal. Within the portal, click “Loan Summaries” in the toolbar. On the Loan Summary page, look for “Hardship Accommodation Plan” in the bottom-right corner. Click “Learn more and enroll.”
• Renewals: You may renew the Hardship Accommodation Plan through the MySBA Loan Portal. If you are unable to renew through the portal, please contact COVID-19 EIDL customer service (include Hardship Accommodation Plan in the email subject line), or send a message through the MySBA Loan Portal. You will be contacted by a loan specialist regarding requirements. 

If your loan amount exceeds $200,000:  

• First-time enrollment and renewals: Please contact COVID-19 EIDL customer service (include Hardship Accommodation Plan in the email subject line) or send a message through the MySBA Loan Portal. You will be contacted by a loan specialist regarding requirements.