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The CARES Act and COVID-19 Loan Programs

04.02.2020 Written by: Henningson & Snoxell, Ltd.

SBA Loan

The Coronavirus Aid, Relieve, and Economic Security (CARES) Act was recently signed into law to assist businesses (including nonprofits and churches) during the COVID-19 crisis. In doing so, the CARES Act initiated several new programs:

SBA Economic Injury Disaster Loan (EIDL)

A low-interest, long-term economic injury disaster loan up to $2,000,000 (businesses can request up to $10,000 be disbursed immediately). The business can request a “grant” within 3 days of the application. Some of this loan may be forgiven, and the first payment can be deferred for 12 months.

  • Interest rate for small businesses: 3.75% 
  • Interest rate for non-profits: 2.75%

Can be used for:

  • Paying fixed debts
  • Paying rent
  • Making mortgage payments
  • Making payroll
  • Paying accounts receivables and other bills that can’t be paid because of the disaster’s impact on the business

SBA Paycheck Protection Program (PPP)

A $350 billion loan program available to small businesses, self-employed people and gig workers to help them from going under due to the COVID-19 pandemic. If the employer maintains payroll, the loan will be forgiven. 

Can be used for:

  • Employee and contractor compensation
  • PTO
  • Healthcare benefits
  • Payroll taxes
  • May be able to be used to pay rent, utilities, and interest on mortgages, etc.

MN Small Business Emergency Loan Program

These loans are made through an employer’s lender and are for $2,500 to $35,000 (0% interest rate). This loan could help a small business meet its expenses during the COVID-19 crisis.

MN Small Business Loan Guarantee Program

Provides an 80% loan guarantee for loans up to $250,000 made by a qualified economic development lender within this program. Intended to incent the private market to make loans to small businesses, it provides a guarantee for those loan dollars. 


There is a lot of fraud out there around financials and SBA links. Only click on trusted emails for this program. Better yet, contact your business banker to get details and guidance on which programs would be available and best for your business.

For more small business assistance programs, visit the MN Department of Employment and Economic Development’s Guide for Minnesota Small Businesses Who Need Help, or contact our office.

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