The House Passes Additional Legislation to Replenish PPP Loan Funding
Thursday, the House passed the newest federal stimulus package aimed at providing relief for SMBs impacted by the COVID-19 crisis. The legislation delivers $310 billion to replenish the SBA’s Paycheck Protection Program (PPP).
If you were under a rock and have not heard about this program earlier, the Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. And, SBA will forgive loans if all employees are kept on the payroll for eight weeks, and the money is used for payroll, rent, mortgage interest, or utilities.
There’s been negative press about who is being awarded these funds. Negative feedback notwithstanding, you can apply through any existing SBA 7(a) lender or any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Applicants have the best chance of success when they work with their bank where they have an established relationship.
The Paycheck Protection Program will be available through June 30, 2020.
Who Can Apply
It’s not too late to get in on this program. The following entities affected by Coronavirus (COVID-19) may be eligible:
- Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
- 500 employees, or
- That meets the SBA industry size standard if more than 500
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- Sole proprietors, independent contractors, and self-employed persons.
For additional details, including FAQs, visit the Small Business Association by clicking here.
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