According to the Treasury Department, small businesses can apply for emergency loans on Friday, April 3, 2020. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion stimulus bill included $349 billion to the Paycheck Protection Program, providing small businesses with the capital they need for overhead and payroll. Starting Friday, April 3, small businesses and eligible with less than 500 employees, including nonprofit organizations, can apply for emergency loans. On Friday, April 10, independent contractors and self-employed workers can apply as well.
Last week we indicated that agencies had to maintain at least 90 percent of staff, but the forgiveness is more flexible than a flat 90 percent requirement under this SBA loan for entities with less than 500 employees.
According to the SBA site, “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.”
Loans are applied for through your regular lender. A downloadable form is found here, and for more general questions and answers, go to the Paycheck Protection Program. Some businesses could start to apply last Friday.
For the latest guidance, please see the Treasury Department’s guide and
Coronavirus (COVID-19): Small Business Guidance & Loan Resources periodically and since this article was written for the latest information.
To apply for a COVID-19 Economic Injury Disaster Loan, click here.