CARES Act – Small Business Administration’s Paycheck Protection Loan Program Explained

The Paycheck Protection Program (PPP) is a loan designed to help small businesses keep their workers on payroll.

This program is available through June 30, 2020. Here’s what you need to know.

The details of this program are still evolving and this page will be updated accordingly.

It provides qualified small businesses and non-profits with:

• favorable loan terms to cover employee salaries
• payroll support (including paid sick or medical leave)
• mortgage
• rent
• utility payments
• insurance premiums
• other d­­­­­­­ebt obligations

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

• Business must be operational as of February 15, 2020
• in general, businesses with less than 500 employees, and had employees for whom it paid salaries and payroll taxes, or a paid independent contractor, sole proprietorships, independent contractors and self-employed persons
• hospitality and food industry businesses that have more than one location may be eligible, at the individual store and location level if the store employs less than 500 workers
• A prospective borrower is still eligible to apply for a Payroll Protection loan even if it has laid off employees or shut down operations

The loan will be fully forgiven if the funds are used for:

• payroll costs
• interest on mortgages
• rent
• utilities
• at least 75% of the forgiven amount must have been used for payroll

The employer must maintain or quickly rehire employees and maintain salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

• Loan payments will also be deferred for six months
• No collateral required
• No personal guarantee required
• There is no charge or fees to apply or to receive the loan
• If not fully forgiven, the loan has a maturity of 2 years and an interest rate of 0.5%

Email us to receive the form and be expedited to a lender, as we are approved consultants and will facilitate the process as you work with a reputable and regulated SBA 7(a) lender.

We will be expediting and processing loan applications as soon as April 3, 2020.

Updated: 3/3/2020