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On April 27, 2020 the Small Business Association (SBA) will resume accepting applications through the Payroll Protection Program. This additional funding to the new COVID-19 relief package will allow for an additional $310-million in funds for the program which offers forgivable, 1% interest loans for eligible companies with a maximum of 500 employees.
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The original $350-million of funding was loaned out through the program in the program’s initial two weeks. The loans are forgivable in full if the companies use 75% of the federally backed money on paying and retaining their employees.
Small Businesses 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 in the program.
To learn more about the COVID-19 relief options available for your business call our office or check the SBA website.
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