You may qualify for this new loan program that comes with free business consultations.
New businesses, veteran-owned businesses, and other small businesses in underserved markets can benefit from Community Advantage Recovery Loans, a new temporary loan program from the SBA. The CA Recovery Loan (CARL for short) provides funding for general business uses, as well as free consulting to help you adjust to the pandemic. Here’s our comprehensive guide to this loan.
Up to $250,000 in funding
Payments covered for first six months
Five-year term, up to 9.25% interest (prime + 3%)
Loan must be approved by September 27
At least 15 hours of free business advice provided
What is an underserved market?
If your business falls in any of the following categories, you may be eligible for a CARL loan:
New business: operating for less than two years
Located in a Low-to-Moderate Income (LMI) community, as defined by the Federal Financial Institutions Examination Council
Owned by a veteran or a spouse of a veteran
More than 50% of the full-time workforce is low-income or lives in a LMI census tract
Located in a Rural Area, as defined by the Census Bureau
If you aren’t sure if you qualify, check with a participating lender.
What can I spend my loan on?
You can use the loan for a broad range of expenses—renovations, inventory, supplies, and working capital expenses are all allowed. The conditions of a CARL loan follow the SBA 7(a) loan requirements, so you cannot use the loan to pay off debts or purchase a portion of a business or a portion of another owner’s interest in a business. Check with your lender for full details.
Pro tip: if you don’t have a bookkeeping solution yet, consider implementing one as part of your business strategy. As part of your free consultation, your advisor may be able to help you get your records organized for a bookkeeper. At Bench, we can help you choose the right bookkeeping solution for you. Book a free consultation.
What kind of free consultation do I get?
Your loan comes with at least 15 hours of “technical assistance”. This will come in the form of advice and consultation tailored to your business’s needs. The intention of the advice is to help improve your business’s financial resiliency against future business challenges.
Some examples of assistance you may receive include:
shifting your business model to account for COVID-19
implementing an online presence
building cash reserves
setting up a budget and preparing financial statements
developing a reopening plan
The technical assistance can begin up to 30 days before the loan is approved, and must be completed within six months after receiving loan funds. The consultation fee is entirely paid for by the SBA.
Can I get a CARL if I have an EIDL or PPP loan?
Where can I apply for a Community Advantage Recovery Loan?
Only certain lenders can qualify, so you may need to do some research. Only approved Community Advantage lenders participating in the CA Pilot Program can participate.
Here are a few lenders we’ve identified that are participating in the CARL program.
Note that lenders usually only serve their local area. We’ve listed the lender’s location for reference. Listings are not necessarily an endorsement by Bench.
Common Capital (Massachusetts)
MoFi (Montana, Idaho, Wyoming)
For more information on relief funds:
- States Offering the New $300 Unemployment Benefit (Read time 4 minutes)
- How the Executive Orders Affect PUA and Payroll Tax (Read time 2 minutes)
- What is the Main Street Lending Program? (Read time 2 minutes)
- Comparing HEALS and HEROES Stimulus Bills for Small Businesses (Read time 4 minutes)
For all other aspects of your business:
- The Top 7 QuickBooks/DIY Mistakes (and How to Fix Them) (Read time 5 minutes)
- Tax Liability: What It Is and How to Calculate It (Read time 7 minutes)
- The Independent Contractor’s Guide to Taxes (with Calculator) (Read time 10 minutes)
- Cash Basis Accounting vs. Accrual Accounting (Read time 5 minutes)