The Department of Treasury has released the Paycheck Protection Program and supplemental information, under the newly passed Coronavirus Aid, Relief and Economic Security Act (CARES) legislation. This article includes information which we recommend you review if you are considering applying for a loan under this program.
The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by authorizing up to $349 billion toward job retention and certain other expenses.
The provisions in the CARES Act for Small Business owners include:
- Paycheck Protection Loan Program expands loan eligibility under the SBA 7(a) loan program with the intention to assist businesses with covering costs related to payroll (including healthcare and certain related expenses), mortgage interest, rent, leases, utilities and interest on existing debt.
- Borrowers will need to certify that they’ve been impacted. There will be no personal guarantees or collateral associated with the loan.
- Loan amount maximum is 2.5 times average monthly payroll or up to $10 million.
- There will also be a payment deferral and loan forgiveness program.
Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.
Below are resources from the US Department of the Treasury to help you determine if you should apply for the loan:
- Review all four documents listed under the “Assistance for Small Businesses” section.
- The program overview.
- The application and accompanying borrower guide.
- You will need to contact your local banker to discuss the lender guide to ensure they are aware of program requirements. While it is our understanding that virtually all banks and credit unions will be able to process program applications, you should verify that your bank intends to support the program.
- Additionally, they have Assistance for American Workers and Families.
While the application and documentation requirements are simple, it is important to review all the documents provided. GS Inc. can you assist you in understanding these documents.
We recommend that you also check with your lending institution as many are holding webinars to discuss their process for these loans.
Please contact GS Inc. if you have questions regarding applying for these loans.