Over $100 billion in PPP capital remains available to loan to small businesses and not-for-profit organizations. The loan provides eight weeks of payroll and certain overhead in order to keep workers employed.
The Payroll Protection Program (PPP) was created through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act and is responsible for infusing capital into small businesses nationwide to help save jobs.
Potential loan forgiveness is based on the borrower maintaining or quickly rehiring employees while maintaining salaries and hours. PPP loans have a maturity of 2 years and an interest rate of 1%.
PPP has awarded over 2.3 million loans as of Tuesday, May 5, 2020. More than 900,000 of these loans were issued by small lenders. The average PPP loan size is currently $76,000.
“The Paycheck Protection Program is working. Small businesses are keeping their employees on payroll and earning salary,” said Steve Bulger, Atlantic Regional Administrator for the U.S. Small Business Administration, in a written statement. “For this federal program to work for you and your employees, I encourage you to submit an application through a PPP-participating bank, credit union, CDFI or online lender.”
Approved lenders can be found using the SBA Lender Locator. Readers are encouraged to go to this site to learn more. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
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 1%.
If you wish to begin preparing your application, you can download a copy of the PPP borrower application form to see the information that will be requested from you when you apply with a lender.