Under the coronavirus relief package, nearly $350 billion was allocated to the Small Business Paycheck Protection Program to help businesses with 500 or fewer employees with loans of up to $10 million. The loans will be forgiven if businesses use the funds to cover payroll costs and other operating expenses in the eight weeks following loan origination.
The U.S. Treasury Department has issued updated legislation on the guidelines for the SBA Loan Program. We’ve highlighted the noted changes below.
- The loan interest terms have changed to .5% and 2 years
- Due to the high subscription rate, they anticipate a 25% cap on forgiveness for non-payroll expenses
- Loan payments are deferred for 6 months, but interest accrues over that period
- Small businesses and sole proprietorships can apply beginning April 3; independent contractors and self-employed persons cannot apply until April 10
- The application must be signed and dated by CEO and questions 5-7 need to be signed and dated by everyone who owns 20% or more of the company.
- Neither the government nor lenders will charge small businesses any fees.
The Treasury and the SBA both have information about the program and includes links to the application form for borrowers and fact sheets about the program for both lenders and borrowers.
If your business is under or close to 500 employees and you want to review the benefits of this program, contact your BMF Advisor to discuss and help with the application.
Visit our COVID-19 Resource Center for the latest updates and resources for you and your business.
