On April 2, the Small Business Administration (SBA) issued an “Interim Final Rule and Final Borrower Application” for Paycheck Protection Program Loans. Eligible organizations must apply for this loan through an approved Small Business Administration (SBA) lender. Loans are forgivable if certain criteria are met and provided on a first come, first served basis.
WHAT YOU NEED TO KNOW: PAYCHECK PROTECTION PROGRAM LOANS
Starting on April 3, 2020, businesses can begin applying for Paycheck Protection Program Loans (PPP). PPP is a $349 billion federal program, administered by banks and credit unions designed to help small business and nonprofits preserve jobs during the coronavirus pandemic. Loans under the PPPL are forgivable if certain criteria are met. Loans will be issued on a first come, first served basis.
WHAT YOU CAN DO NOW
CONTACT YOUR BANK REPRESENTATIVE ASAP TO FIND OUT WHAT YOUR BANK IS DOING. Some banks are accepting applications today and some banks are not ready.
Complete this application and gather the necessary documentation.
Lenders will be asking for certain documentation to support the PPPL application.
Locate a Lender
Businesses must apply through an approved SBA Preferred Lender for PPPL. SBA has published a searchable list of eligible lenders here:
**We recommend that businesses contact banks for which they already have an existing relationship – i.e. deposit, loan or line of credit accounts. It is our understanding that it will slow down the PPPL process significantly if businesses try to apply for PPPL through an institution for which they do not have an existing relationship due to banking regulations called “Know Your Customer.”**
WHAT YOU NEED TO KNOW: ECONOMIC INJURY DISASTER LOAN PROGRAM
The Small Business Administration’s (SBA) disaster loans are the primary form of Federal assistance for the repair and rebuilding of non-farm, private sector disaster losses. The disaster loan program is the only form of SBA assistance not limited to small businesses.
The Economic Injury Disaster Loan Program (EIDL) can provide up to $2 million of financial assistance (actual loan amounts are based on amount of economic injury) to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage.
An EIDL can help you meet necessary financial obligations that your business or private, non-profit organization could have met had the disaster not occurred. It provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDLs do not replace lost sales or revenue.
**Before entering the final information, you will be asked if you would like to be considered for a $10,000 advance on your loan. This is the $10,000 grant that is mentioned in the CARES Act. Businesses who request this $10,000 advance on their loan (which is being called a grant) and are approved are expected to receive it within three days. This $10,000 advance does not need to be paid back — though the rest of your disaster assistance loan will need to be paid back.**