Small Business Administration Paycheck Protection Program
The new Paycheck Protection Program will help small businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. Small business owners can start applying for funding on Friday, April 3, 2020 and independent contractors and self-employed individuals can start applying Friday, April 10, 2020.
What will this do for me? 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.
Who can apply? 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) veterans organizations affected by coronavirus/COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries. Small businesses in the hospitality and food industry with more than one location could also be eligible if their individual locations employ less than 500 workers.
How do I 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.
- Click HERE to find lenders near you that are eligible to issue a loan under the Paycheck Protection Program.
- If you want to start preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.
What are the loan details/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 1%.
What if I work at a private club and am not currently covered under the CARES Act? Click here for further guidance if you are in this situation.
For more information, please visit the Small Business Administration’s (SBA) Paycheck Protection Program website.