Small Biz Funding Application Available

The United States Department of Treasury has released the Payroll Protection Program Application Form for the SBA 7(a) Loan Program.  As expected, the application and documentation requirements are simple and streamlined as opposed to traditional SBA lending. 
 
The Payroll Protection Program provides small businesses with funds to pay up to eight weeks of payroll costs, including benefits. Additionally, the funds can be used for debt service, rents and utilities.  The Program authorizes up to $349 billion in loans for small businesses to keep their employees on payroll during the COVID-19 pandemic.
 
Borrowers can see an outline of the terms of the Payroll Protection Program on the Information Sheet released by the United States Department of Treasury.  A few of the highlights of the program are as follows:

  • Loan forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

  • Small businesses with 500 or fewer employees, including nonprofit 501 c(3) organizations, are eligible.

  • Lenders can file applications for small businesses and sole proprietorships starting April 3rd.

  • Lenders can file applications for independent contractors and self-employed individuals starting April 10th.

  • You can apply through any existing SBA 7(a) lender or through 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. All loans will have the same terms regardless of lender or borrower.

While the loan can be applied for through June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap.  Borrowers should start working with lenders and their CPAs now in order to have everything ready to file once the application filing window opens (April 3rd or 10th, as described above). 
 

~~Brian Muia, Shareholder~~

Small Business TaxDebbie Harry