SMALL BUSINESS PAYCHECK PROTECTION PROGRAM (click here to find out more on the SBA website)
The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent and utilities.
Funds are provided in the form of loans that will be fully forgiven when 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 be deferred for 6 months. No collateral or personal guarantees required. Neither the government nor lenders will charge small businesses any fees.
Must Keep Employees on 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 including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships and independent contractors are eligible. Businesses with more than 500 employees are eligible in certain industries.
When to Apply
Starting April 3rd, 2020 small businesses and sole proprietorships can apply. Starting April 10th, 2020 independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as possible because there is a funding cap.
How to 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 lenders as to whether it is participating. 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.
Frequently Asked Questions about The Payroll Protection Program
Where can I find more information?
The Small Business Administration (SBA) has a wealth of information for small business disaster relief. You can check out their resources on the Coronavirus (COVID-19): Small Business Guidance & Loan Resources page.
What financial information do I need to apply?
Each financial institution varies. You can find an example loan application online, click here to download the PDF.
Where can I apply for a loan?
Contact the bank where you have your business checking account. Not all financial institutions are ready to accept applications, however here are a few places to try:
- Chase - You must have an existing business checking account