 The SBA just released (March 31) the following materials related to the Paycheck Protection Program loans. We will continue to communicate any additional information we receive, but as this is #1 question of the day, I wanted to get this information out to you as soon as possible. I urge you to consult with your regular local banking partner first and foremost as it is likely they will be a part of the program.
Program Overview The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. 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. View the Paycheck Protection Program (PPP) Information Sheet for Borrowers here How do I apply? Lenders may begin processing loan applications as soon as April 3, 2020. According to the Florida Banker's Association, starting April 3, 2020, small businesses and sole proprietorships can apply and starting April 10, 2020, independent contractors and self-employed individuals can apply. 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. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. If you wish to begin preparing your application, you can download a sample application form to see the information that will be requested from you. Loan Details and Forgiveness 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. Neither the government nor lenders will charge small businesses any fees. 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. This loan has a maturity of 2 years and an interest rate of .5%. Also one of the most helpful forms I have found so far is the US Chamber Small Business Guide and Checklist for helping you navigate the calculations.
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