The CARES Act includes approximately $350 billion for an SBA small business loan program called the Paycheck Protection Program. The goal of this program is to get money to small businesses quickly (and with minimal application requirements). This loan program is also designed to encourage businesses to continue to employ their workers and re-hire (if necessary).
You can begin applying for this loan through your local federally insured bank or credit union. Lenders are permitted to begin processing applications this Friday, April 3, 2020. Some key provisions of the Paycheck Protection Program loans are set forth below. Also, you can go to the SBA’s website for the Paycheck Protection Program .
- Designed to small businesses with less than 500 employees;
- Payments on loan are deferred for six months
- Loan maturity 2 years at .5%
- Loan will be completely forgiven is used for payroll expenses, rent/mortgage and/or utilities;
- Forgiveness only if employer maintains salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- The forgiveness of debt amounts will not be included in taxable income.