Business bruised by COVID-19? The federal government may have $10,000 for you.

(Public domain photo)

The federal Small Business Administration says it’s ready to make immediate “loan advances” of up to $10,000 to companies hurt by the coronavirus.

But you don’t have to be a traditional company, and this is a “loan” you might not have to pay back.

It’s an overlooked feature of the $2.2 trillion CARES Act, different from the Paycheck Protection Program that’s getting more attention.

It starts with an application on SBA.gov for an Economic Injury Disaster Loan. EIDL is the Small Business Administration’s garden-variety disaster assistance, but Congress expanded the program in its COVID-19 response bill. Sole proprietors, with or without employees, are eligible. That can include landlords, vendors or self-employed contractors.

Here’s a $10,000 pro tip from Jon Bittner, executive director of the Alaska Small Business Development Center: Be sure in your application to request a loan advance.

“They call it a ‘loan advance,’ but basically, you get it whether or not you get the loan,” Bittner said, “and you don’t have to pay it back.”

This benefit wasn’t available when the state of Alaska first declared its COVID-19 disaster.

“So if you have already submitted your (EIDL) application, you really need to go back and do it again and ask for the $10,000,” Bittner said. “And that’s totally OK. They’re telling you to do that. But some people haven’t gotten the message.”

The loans themselves have a fixed interest rate of 3.75%, or 2.75% for nonprofits.

“It’s a good deal, and they’re actually not asking for the initial payment for up to, in some cases, four years,” Bittner said.

The SBA has pledged to process the paperwork and cut checks within three days.

Does that sound too good to be true? Bittner said the SBA does have some technical limitations.

“Their website crashed — I mean, almost immediately — just because nobody thought that the entirety of, you know, the United States’ population was going to try to check it out at the same time,” he said.

The CARES Act has money for the Small Business Administration to add staff, but Bittner said no one should be too disappointed if it takes more than three days to get a $10,000 cash advance.

The Paycheck Protection Program also has a grant component. That kind of government-backed loan is available through banks.

“If you use that over the next two months to pay for certain expenses, like payroll, rent, certain debt service and things like that, up to 100% of the loan can be forgiven,” Bittner said.

The Paycheck Protection loan is designed to help businesses and nonprofits keep or rehire their workers. Bittner said the forgiveness could be reduced if an employer lays off workers. And he points out, the guidelines for these programs are in flux.