Paycheck Protection Program – Applications Open April 3
The Paycheck Protection Program (PPP) authorizes forgivable loans to small businesses to pay their employees during the COVID-19 crisis.
Under PPP a non-profit or for-profit creative business business would not have to pay back the amount received if it complies with the requirements of the loan – essentially to keep employees or at least hire them back within the next year.
Loan amounts will be forgiven as long as:
- The loan is used to cover payroll costs, and most mortgage interest, rent and utility costs over the 8-week period after the loan is made and
- Employee and compensation levels are maintained.
Here’s the link to the PPP fact sheet: home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
Local lenders authorized to service Small Business Administration (SBA) loans will begin processing PPP applications on Friday, April 3.
The SBA recommends that small business owners interested in applying for a loan under the Paycheck Protection Program immediately download this form home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf and begin preparing the application. However, check with your bank as some are setting up their own online portals and forms to fill out.
When local banks review PPP applications, they will most likely give priority to existing customers. Contact the SBA officer at your bank immediately and confirm the details of the application process.
Economic Injury Disaster Loans
For business owners interested in applying for an Economic Injury Disaster Loan under the CARES Act, the online process has been streamlined.
The Coronavirus Aid, Relief and Economic Security Act (H.R. 748, CARES Act) was signed into law on March 27 – the third stimulus bill aimed at providing relief to employers and individuals affected by COVID-19.
Business owners applying for an EIDL should immediately go to the SBA website and complete the online application.
Business owners who receive emergency EIDL grants under the CARES Act and don’t want to impair their eligibility for loan forgiveness under the PPP program should be careful to utilize funds in strict accordance with the requirements of the PPP program.