Type to search

Featured Government

SBA, U.S. Treasury launch $349B Paycheck Protection Program

The U.S. Small Business Administration and the U.S. Department of Treasury announced the start of the $349 billion Paycheck Protection Program, to provide relief to millions of small businesses so they can sustain their businesses and keep their workers employed.

“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly. Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level,” said SBA Administrator Jovita Carranza, about the program that includes Puerto Rico.

“Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans,” she said.

“We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine,” Carranza added.

The program is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed last week to address the economic impact of the fight against the spread of the coronavirus COVID-19 pandemic.

“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said U.S. Treasury Secretary Steven T. Mnuchin.

“Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day,” he said. “The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”

The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from the SBA.

All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.

All businesses, including nonprofits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries, are eligible to apply.

The maximum loan amount is for up to $10 million and all loans under this program will have the following conditions:

  • Interest rate of 0.5%;
  • Maturity of 2 years;
  • First payment deferred for six months;
  • 100% guarantee by the SBA;
  • No collateral;
  • No personal guarantees; and,
  • No borrower or lender fees payable to the SBA.

Author Details
Author Details
This story was written by our staff based on a press release.

1 Comment

  1. Economo Daily May 18, 2020

    Paycheck Protection Program (PPP) is not the resolution of the latest coronavirus crisis. We should build a more resistent economy and business.


Leave a Comment

Your email address will not be published. Required fields are marked *