Paycheck Protection Program (PPP)
The Paycheck Protection Program is a business loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
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.
This loan has a maturity of 2 years and an interest rate of 1%.
Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls.
*Information from sba.gov
NOTE: Although all banks currently certified as SBA lenders are eligible to make PPA loans, many require that you already have an established banking relationship with them in order to get the loan. Please check with your individual banking institution regarding its participation in this program and follow their guidelines.