Beginning Friday, April 3, small businesses will be able to apply for economic stimulus loans backed by the U.S. Small Business Administration. The $350 billion Paycheck Protection Program is designed to incentivize small businesses to retain their workforce during the COVID-19 crisis.
Loans will be distributed on a first come, first serve basis, so please share this information with other small businesses and if eligible you are encouraged to apply as soon as possible with a participating financial institution.
What businesses 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 at the store and location level if the store employs less than 500 workers. This means each store location could be eligible.
How to apply
Small business owners 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. Business owners should consult with local lenders as to whether they are participating in the program.
Lenders may begin processing loan applications as soon as April 3, 2020.
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%.
If you wish to begin preparing an application, download a sample form to see the information that will be requested.
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are currently eligible to apply for disaster assistance.
Enhanced Debt Relief is also available in SBA’s other business loan programs to help small businesses overcome the challenges created by this health crisis. For information on additional Lending options, please click here.
Putnam County COVID-19 Resource Guide - Click on the above image to learn about meal offerings, transportation and delivery, COVID-19 Call Centers, and Mental Health Agency Contact Information