What is an SBA loan?

An SBA loan is a small business loan that is partially guaranteed by the Small Business Administration. The Small Business Administration (SBA) works with a network of financial institutions that provide funding to small businesses. These financial institutions lend small businesses money more frequently and with better terms than a traditional bank – due to the loans being partially guaranteed by the SBA. The SBA can cover up to 85% of a loan amount, meaning if a business is unable to pay back the full loan amount, the SBA will cover the amount they guaranteed. Due to this guarantee, it is generally easier for small businesses to qualify and be approved for funding, in comparison to a traditional bank loan.

COVID-19 Relief Options

The Small Business Administration offers multiple types of funding relief options for small businesses. In response to the coronavirus pandemic, the SBA offers four COVID-19 relief options. This includes a Paycheck Protection Program, Economic Injury Disaster Loans, Shuttered Venues Grant, and a Restaurant Revitalization Fund.

Paycheck Protection Program (PPP)

The Paycheck Protection Program loan was created to provide small businesses with financial assistance to maintain payroll and cover lost business costs. This funding could be used to pay for up to eight weeks of payroll. Along with benefit costs for employees, and interest on rent, mortgages, and utilities. The amount a small business can receive is dependent on their payroll expenses but has been limited to a maximum amount of $100,000 per employee. Another advantage of this program is that it offers loan forgiveness. If an employer uses the funding for at least 60% of payroll expenses and the other 40% on interest and/or benefit costs for employees, they may be eligible to receive full forgiveness of the loan.

Economic Injury Disaster Loans (EIDL)

The EIDL advance program was designed to provide funding for businesses that were negatively impacted by the COVID-19 pandemic. The SBA offered two types of EIDL funding – an EIDL loan fund and EIDL advance fund. The EIDL loan fund must be repaid and can be used for any operating expenses a business may have. The EIDL advance fund was offered to private nonprofits and businesses affected harder than others – which they do not have to repay. This advance was only offered to applicants in low-income communities that could show a reduction in revenue of over 30% and had fewer than 300 employees.


relief options

The EIDL program can provide up to $2 million in disaster assistance to a business.


Shuttered Venue Operators Grant (SVOG)

The mission of the Shuttered Venue Operators Grant was to support performing art businesses that were affected by the coronavirus. The program included over $16 billion in grants to eligible live venues, museums, theatres, producers, live venue promoters, and more. For eligible businesses, the grant amount offered was equal to 45% of their 2019 gross earned revenue or $10 million.

Restaurant Revitalization Fund (RRF)

The Restaurant Revitalization Fund was established by the American Rescue Plan act. The goal was to provide restaurants with funding to keep their businesses afloat and open. This funding was offered to restaurants, food trucks/stands, caterers, bars, bakeries, and more. The potential award amount for this funding depended on a business’s pandemic-related revenue loss. However, the SBA set a limit of $5 million per physical location. Recipients of the restaurant revitalization fund are not required to repay the funding if used for eligible purposes. Eligible uses for the funding included payroll costs, mortgage/rent payments, maintenance, business supplies, and more.