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Growth beyond the pandemic – Small businesses look at the CARES ACT with new eyes

The generous temporary incentives linked to section 7 loans of the CARES ACT  shows it is a good time to fund investment.  When Congress passed the CARES coronavirus recovery act in late March, most of the attention was given to the billions in funding made available to small businesses for the paycheck protection program and economic injury disaster loans provided by the Small Business Administration. Those loan programs were designed specifically for firms affected by the coronavirus pandemic and since then millions of small businesses have taken advantage of the relief. But there’s another part of the Cares Act that also provides a big benefit to small businesses that some see as an «opportunity of a lifetime» and yet it hasn’t received as much attention. It’s a Small Business Administration program that’s been around for a long time.

Under the program, small businesses that are unable to get traditional financing through banks can apply for funds that can be used then for anything from buying a business and real estate to working capital. The loans have been popular in the past because the SBA guarantees them, so banks are able to get the money into the hands of small businesses that don’t have collateral or financial history.

The short-term tweaks to the Section 7 program have another purpose: help small businesses grow beyond the pandemic.

The paycheck protection program and economic injury disaster loans are providing much-needed relief. That’s because economic downturns cause disruption. But now that most signs are pointing to recovery, many of the business owners are looking to take advantage of opportunities. They see the potential to hire key people, buy real estate, snap up inventory and equipment, and even acquire other businesses.

The ones with capital right now are the ones who will benefit. The incentives for getting a Section 7, thanks to the Cares Act, can help provide that much-needed capital – not for survival, but for future growth. It can be a great opportunity for those who can see beyond the immediate horizon.

We hope this article has been useful for our community. We will continue to share with you updates on this issue during this period of crisis and complexity.  

Until the next time… 

Stay safe and be well!

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