Late yesterday, the White House announced the start date for the newly created Paycheck Protection Loan Program. This program was authorized under the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The Paycheck Protection Loan Assistance program expands and modifies an existing Small Business Administration (SBA) Loan program.
The purpose is to help any small business that is struggling financially due to the COVID-19 pandemic.
What makes this loan program unique is that the government will forgive all or most of this loan if the business does not terminate employees during the pandemic.
The Paycheck Protection Loan Program is authorized to “lend” up to $349 billion toward job retention and certain other business expenses.
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.
For this program, a “small business” can have up to 500 employees.
Employee calculation: This is the average number of people employed for each pay period over the business’s latest 12 calendar months. Any person on the payroll must be included as one employee regardless of hours worked or temporary status. The number of employees of a concern in business less than 12 months is the average for each pay period that it has been in business.
Small businesses can begin applying for this program as follows:
- Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
- Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
View the fact sheet if you’re a potential borrower or you want more details on the program.
Some of the information you will find in these documents are:
- Where can I apply? What other documents will I need for my application?
- Who can apply? How long will this program last?
- What do I need to apply? What can I use these loans for?
View the top-line overview of the program.
View the application for borrowers.