Paycheck Protection Program Now Accepting Applications from Small Businesses Impacted by Coronavirus
Today, small businesses across the U.S. can begin submitting their applications to the Paycheck Protection Program for forgivable loans to support payroll and other vital expenses. This program, which was created in the recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act, is a nearly $350 billion program to provide eight weeks of liquidity to businesses who maintain their payroll during this public health emergency.
Senator Richard Burr (R-NC), who supported this program in the CARES Act, urged North Carolina small businesses to take advantage of the Paycheck Protection Program during the ongoing public health emergency.
“There are more than 30 million small businesses in the United States, and we are working to keep it that way,” said Senator Burr. “They are the backbone of our economy, but right now they are facing unprecedented pressure and uncertainty. The Paycheck Protection Program is one of the many tools created in the CARES Act to help small businesses stay afloat and keep their employees on payroll. Under this program, small businesses can apply for loans that can be forgiven in full if the employer maintains a full payroll over eight weeks and uses the loan for payroll and other essential expenses, like rent, mortgage, or utilities. Simply put, this program is designed to help small business owners and workers literally keep the lights on.
“If you operate a small businesses or other eligible organization and are struggling under the current coronavirus crisis, I strongly recommend learning more about the Payroll Protection Program and other available options from the Small Business Administration.”
On March 27, 2020, President Trump signed into law a historic, $2 trillion emergency funding package called the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act created thePaycheck Protection Program (PPP), which provides nearly $350 billion to prioritize small businesses and their employees during this public health emergency.
Starting today, April 3, 2020, small businesses with 500 employees or fewer – including non-profits, Veterans organizations, Tribal businesses, self-employed individuals, sole proprietorships, and independent contractors – can apply for immediate liquidity through the PPP. The Department of Treasury will release guidelines for self-employed Americans and independent contractors to apply for PPP loans next week. Additionally, charities and religious institutions are eligible for loans if they meet the program size standards.
Under the PPP, eligible recipients may qualify for a Small Businesses Administration (SBA) loan up to $10 million determined by eight weeks of prior average payroll plus an additional 50 percent of that amount. Loan payments will be deferred for six months.
However, the loan will be fully forgiven if all employees are kept on the payroll for eight weeks and the loan goes towards payroll and other expenses, such as rent, interest on mortgage, and utilities.
This program is retroactive to February 15, 2020, which will give small businesses the ability to bring back workers who have already been laid off. PPP will be available through June 30, 2020.
Small businesses can apply through most existing SBA 7(a) lender or through approved federally-insured depository institution, federally-insured credit union, and Farm Credit System institution that is participating. For additional information, including a list of participating lenders, and the latest guidance, visit the SBA.gov or Treasury.gov.
Prospective borrowers can review the latest fact sheet released by the Department of Treasury here.
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