LA CARES Corps is a partnership between the City and County of LA to provide small businesses with the help they need to apply for federal loans under the CARES Act
What is the CARES Act?
The new Coronavirus Aid, Relief, and Economic Security (CARES) Act Act provides $349 billion in Small Business Administration (SBA) loans. These loans are meant to provide emergency assistance to businesses affected by the coronavirus (COVID-19) pandemic. In addition to traditional SBA funding programs, the CARES Act established several new temporary programs to address the COVID-19 outbreak, including the Economic Injury Disaster Loans (EIDL), Emergency Economic Injury Grants, and the Paycheck Protection Program (PPP).
Economic Injury Disaster Loans (EIDL)
A low-interest loan with an optional $10k advance
EIDLs are loans of up to $2 million with a 3.75% interest rate for businesses and a 2.75% interest rate for nonprofits with terms of up to 30 years. This loan offers an optional $10,000 advance as a non-repayable grant within days of a successful application.
Paycheck Protection Program (PPP)
A loan program that provides loan forgiveness for retaining employees
The PPP is a 100% federally guaranteed loan to help small businesses keep workers on payroll for a period of 8 weeks during this crisis. The loans can be up to $10 million with a 1.0% interest rate with a term of two years. It will be fully forgiven if at least 75% of the entire loan is allocated towards payroll, funds are used for eligible uses, and employment and compensation levels are maintained.
|Loan Terms||Economic Injury Disaster Loan (EIDL)||Paycheck Protection Program (PPP)|
|Who is Eligible||Businesses with 500 or fewer employees*
501(c)(19) Veterans Organizations
*Businesses in certain industries may have more than 500 employees if they meet the SBA’s Size Standards for those industries
|Any small business that meets SBA’s Size Standards
(either the industry based sized standard or the alternative size standard of 500 or less employees)
501(c)(19) Veterans Organizations
Tribal businesses with the greater of:
- 500 employees, or
- if more than 500, meets the SBA Size Standard
small businesses in the hospitality and food industry (NAICS Code that begins with 72) with more than one location could also be eligible if their individual locations employ less than 500 workers
|Eligible Uses||fixed debts (rent, etc.), payroll, accounts payable, and other operating expenses||payroll costs including benefits, mortgage interest, rent, utilities|
|Interest Rate||3.75% for small businesses and 2.75% for nonprofits||1%|
|Loan Size||up to $2 million||up to 2.5 x average monthly payroll cost, up to $10 million|
|Loan Term||up to 30 years||2 years|
|Repayment Deferral||12 months||6 months|
|Collateral||no collateral is required for loans of $25,000 or less||none|
|Personal Guarantees||up to $200,000 can be approved without a personal guarantee||none|
|Forgivable portion||up to $10,000 grant
if it is used for authorized reasons
|all IF at least 75% is used on payroll and remainder on eligible uses
forgiveness is also based on the employer maintaining or quickly rehiring employees and maintaining salary levels; forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
|Expiration Date||December 30, 2020||June 30, 2020|
Ready to Apply?
APPLY for EIDL
APPLY for PPP
Start preparing a PPP Borrower Application Form and contact a Participating Lender.
(apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. Find a lender.)
Need Help Applying for SBA Loans?
Contact the LA County Business and Worker Disaster Help Center
Don’t Qualify for SBA Loans?
Apply for a City of LA Small Business Emergency Loan
The City established a Small Business Emergency Microloan Program that provides loans between $5,000 to $20,000 with no interest for a term of up to 18 months, with payments deferred for up to 6 months. It also provides the option of an interest rate of 3% (2% for nonprofits) for a term of up to 5 years with repayment deferred for up to 12 months.
- Review: Summary of the LA City Small Business Emergency Microloan Program (PDF)
- Visit: lamayor.org/Loan for more information and to apply
- Call: 3-1-1
- Engage on social media: @LAEWDD on Twitter, Facebook, and Instagram
For additional assistance applying for a Los Angeles City loan, a SBA loan, or a Federal Financial program, please contact your nearest BusinessSource Center.
During the COVID-19 outbreak it is more important than ever to follow safety standards, stay informed on updated policy changes and regulations protecting the health and well-being of both workers and customers. Download the City of Los Angeles' Policy Guide for LA Small Businesses here.
return to the EWDD Resources for Angelenos Impacted by COVID-19 webpage