Paycheck Protection Program and Loan Forgiveness Requirements

PAYCHECK PROTECTION PROGRAM

The Paycheck Protection Program provides small businesses with funds to pay up to 8 weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent, and utilities.

All Small Businesses Eligible

Small businesses with 500 or fewer employees—including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors —are eligible. Businesses with more than 500 employees are eligible in certain industries.

Loan Forgiveness and Requirements

Funds are provided in the form of loans that will be fully forgiven when 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.

Starting Dates to Apply

Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10,

2020, independent contractors and self-employed individuals can apply.

Applications can be done through any existing SBA 7(a) lender or through any FDIC Bank or Federally insured credit union. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.