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Treasury Issues Guidance on Small Business Loan Program

Wednesday, April 1, 2020   (0 Comments)
Posted by: Annette Ferri
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Treasury Issues Guidance on Small Business Loan Program

On Tuesday, March 31 the U.S. Treasury issued guidance for the Paycheck Protection Program (PPP)

  • provides $350 billion in loans for small businesses impacted by the Coronavirus
  • small businesses and sole proprietorships can apply for loans through the PPP starting on April 3rd
  • self-employed individuals and independent contractors can apply starting April 10th We recommend you contact your accountants and lending institutions as soon as possible to prepare for application due to high demand.

Guidance from the Small Business Administration is available here.
Additional information for borrowers can be found here.
An application can be found here.

SMALL BUSINESS PAYCHECK PROTECTION PROGRAM

  • provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits • funds can be used to pay interest on mortgages, rent, and utilities

FULLY FORGIVEN

  • funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (at least 75% of the forgiven amount must have been used for payroll) 
  • loan payments will be deferred for six months 
  • no collateral or personal guarantees are required
  • neither the government nor lenders will charge small businesses any fees

MUST KEEP EMPLOYEES ON THE PAYROLL—OR REHIRE QUICKLY

  • forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels 
  • forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease

ALL SMALL BUSINESSES ELIGIBLE

  • small businesses with 500 or fewer employees are eligible
  • businesses with more than 500 employees are eligible in certain industries

HOW TO APPLY

  • you can apply through any existing SBA 7(a) lender or through any participating federally insured depository institution, federally insured credit union, and Farm Credit System institution 
  • all loans will have the same terms regardless of lender or borrower 
  • a list of participating lenders as well as additional information and full terms can be found at www.sba.gov


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