Recently funds were tapped out and millions went to franchises of large corporations. On Tues, April 21, the Senate passed legislation that the House will look at this week, will the President signing off on hopefully by the end of the week, that includes an additional $320 billion for the Paycheck Protection Program. You can learn more in this article from Bloomberg.
For the PPP, you will work with a lender, not the SBA. We also are seeing clients who've had success are working with a small, community bank vs a big banks. Not all banks are SBA approved lenders. Some banks have declared they will only work with existing accounts, so if your bank isn't an approved SBA Lender, you may have a hard time finding another bank. Here's a link to approved SBA Lenders and if you need to find additional sources, we've had clients who've had success with Fundera and Paypal.
The PPP is meant to help you keep people employed between now and June 30, 2020. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (at least 75% of the forgiven amount must have been used for payroll).
If you use the money on other things and it's not forgivable and may carry other fines or penalties. The remaining unused balance after June 30, 2020 turns into a loan, that you'll have to repay within two years of the date you received it and will have a very low interest rate of 1%. Loan payments will be deferred for 6 months.
In addition, no collateral or personal guarantees are required, unlike other types of loans. Learn more here.
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.
To apply, you need to find a bank who is servicing these loans.
Find eligible lender with the SBA
Other lending options include Fundera & Paypal, amoung others.
PPP Affiliation Interim Final Rule PDF
PPP Application to be prepared for your lender
FAQ Sheet with lots of details - May not have the most up-to-date info since it's always changing. However, it's a good start to getting the finer details of the program.
PPP Potential Paperwork Requirements - What we've gathered from Members.PPP Calculator (for informational Purposes only)
-- Not official SBA or Lender Calculator