What is the Community Advantage Recovery Loan?

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.

Quick facts

  • 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 an Empowerment Zone, Enterprise Community, HUBZone, Promise Zone, or Opportunity Zone

  • 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

  • reducing expenses

  • 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?

Yes, you still qualify for a CARL even if your business has an EIDL or PPP loan already.

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.

Additional resources

For more information on relief funds:

For all other aspects of your business:

What's Bench?

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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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