The Paycheck Protection Program: What It Means for Small Business Owners
We understand that these are uncertain times for many small business owners. No one could have seen this coming. It was certainly not in your plans to shut down for the coming weeks or even months.
Last Friday, Congress passed the Paycheck Protection Program. We will try to make this brief so you can spend more time on keeping things running.
- The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
- The application is open for submission starting on Friday April 3rd, 2020.
- Loans can be made for up to two months of your average monthly payroll costs from the last year (plus an additional 25% of that amount).
- SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
- The Paycheck Protection Program will be available through June 30, 2020.
- This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veteran’s organizations.
- You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Download an application here to expedite the process.
- The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. No fees will be charged during this time.
We hope this helps. Please let us know if we can guide you through the process. Take care and thanks for keeping the economy going.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Consult the appropriate professional prior to making any financial decision.