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Paycheck Protection Act

March 30, 2020

We have received a lot of questions regarding the recently passed Paycheck Protection Act. We hope this will help to answer some of the questions you may have about this new Program. Please contact an SBA approved local financial institution to help craft a forgivable loan that works for you and your business.
Paycheck Protection Act
The program provides cash-flow assistance through 100% federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis.
How to apply?
Go to the SBA website to find a lender near you. Apply for a loan here.
What costs are eligible to be paid by loan?
  • Payroll costs (as noted above)
  • Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
  • Employee salaries, commissions, or similar compensations (see exclusions above)
  • Payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation)
  • Rent (including rent under a lease agreement)
  • Utilities
  • Interest on any other debt obligations that were incurred before the covered period
 
What costs are not eligible?
  • Employee/owner compensation over $100,000
How much can you receive through a loan?
  • If you were in business February 15, 2019 – June 30, 2019: Your max loan is equal to 250 percent of your average monthly payroll costs during that time period. If your business employs seasonal workers, you can opt to choose March 1, 2019 as your time period start date.
 
What are the loan term, interest rate, and fees?
For any amounts not forgiven, the maximum term is 10 years, the maximum interest rate is 4 percent, zero loan fees, zero prepayment fee (SBA will establish application fees caps for lenders that charge).
How is the forgiveness amount calculated?
Forgiveness on a covered loan is equal to the sum of the following payroll costs incurred during the covered 8-week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):
  • Payroll costs plus any payment of interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligation plus and any covered utility payment.
For more information, contact an SBA approved lender near you or go to the SBA website to get more details online. If you need to talk to someone about Lender Match, you can contact the SBA or email us at lendermatch@sba.gov
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