April 2, 2020
Loan applications under the $349 billion Paycheck Protection Program are scheduled to open this Friday, April 3.
The program is designed to help small businesses keep their workers employed during the COVID-19 outbreak. Borrowers may obtain forgivable loans of up to 2.5 times their average monthly payroll.
Administered at the local level by Small Business Administration (SBA)-approved lenders, these loans have highly attractive terms:
- Available to companies with less than 500 employees
- 0.5% interest
- Loan forgiveness for eight weeks of payroll and a portion of other essential costs (e.g., rent, utilities and mortgage interest)
- First payment deferred for six months
- 2-year maturity
- No collateral
- 100% SBA-guaranteed
- No personal guarantee required
- Can cover costs retroactive to Feb. 15
- Loans available through June 30
Loan guidelines and instructions can be found here. The SBA’s goal is for borrowers to be able to apply with their local lender and gain approval the same day.
To expedite the process, companies intending to apply should review the SBA’s sample application form before contacting their lender.
Executive Vice President
If you have questions or feedback on PEI Industry Alerts, contact Rick Long at email@example.com.