Friday was the first day small businesses can apply for cash flow assistance under the Paycheck Protection Program. The Coronavirus Aid, Relief, and Economic Security Act established the new $349 billion program, which will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Each low-interest loan is designed to provide up to eight weeks of cash flow to small businesses who maintain their payroll during this emergency.
Small businesses and sole proprietorships can apply. Starting April 10th, independent contractors and self-employed individuals can apply. The SBA and Treasury Department encourage businesses to apply as quickly as possible because there is a funding cap. Talk with your bank to see if it is participating in the program or find top SBA approved lenders here.
“Small businesses are the backbone of our nation’s economy,” said Congressman Michael Cloud. “I want small business owners across our district to know much-needed economic relief is available to deal with the burden imposed by the COVID-19 economic shutdown.”
The funds are provided in the form of loans that will be fully forgiven if the business maintains its workforce. Eligible expenses include payroll costs, interest on mortgages, rent, and utilities, and small businesses looking to receive them can apply through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. All loan payments will be deferred for six months. Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program.
Loan Terms and Conditions:
* The program is retroactive from Feb. 15, 2020, so employers can rehire recently laid-off employees through June 30, 2020.
* For small businesses that maintain their workforce, SBA will forgive the portion of the loan used to cover the first eight weeks of payroll and certain other expenses.
* Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries.
* Maximum loan amounts up to $10 million.
* Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs).
Visit treasury.gov/cares for more information on SBA’s assistance to small businesses.