27 Mar 2020 COVID-19 Grants and Loans for Small Businesses
The President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law today. The CARES Act provides historic stimulus for small businesses. Most importantly, a portion of the loans available can be forgiven – turning them into grants.
While some of these loans are available in the form of Small Business Disaster Assistance Loans through the SBA, it is important that you are also aware of the Paycheck Protection Program. We encourage you to meet with your banker today to discuss this loan and grant program as it is more readily available. Here’s what small businesses need to know:
PAYCHECK PROTECTION PROGRAM
- Companies with under 500 employees including sole proprietors, self-employed, independent contractors and nonprofits are eligible.
- The Paycheck Protection Program provides loans for 2 ½ months of payroll costs. A maximum loan of $10 million is available to each company.
- Loan proceeds must be used for payroll, insurance premiums, mortgages, rent, utilities and interest on debt.
- If the funds are used correctly, the loan will be forgiven – turning it into a grant.
- How to apply: Paycheck Protection Program loans are available through your local bank, not the SBA. Call your banker today to discuss this program. We are available for a joint phone appointment with you and your banker. Please let us know if we can help in any way.
- Small businesses and private, nonprofit organizations are eligible. The amount of sales or employees required to qualify varies by industry. Click here to learn more about size qualifications. Click here to view a list of eligible business types.
- The loans offer up to $2 million in assistance for each affected small business.
- These loans can be used for: fixed debts, payroll, accounts payable, and other bills that can’t be paid as a result of the disaster’s impact.
- The interest rate will be 3.75% for small businesses and 2.75% for non-profits. Terms for these loans will be determined on a case-by-case basis, depending upon the borrower’s repayment ability.
- How to apply: You are encouraged to apply for an SBA disaster relief loan through the SBA website or request an application by calling (800) 659-2955.
Our team of experts are working efficiently from our home offices. We are available by phone and email and will continue to serve you during these challenging times. Please contact us for guidance on all your individual and business financial issues. We are here to serve as your trusted advisors.
Stay tuned for more updates regarding how the stimulus will impact businesses and individuals.