Credit unions have decision-making power over whether to participate in the Paycheck Protection Program (PPP), which authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.
The LSCU is currently compiling a list of affiliated credit unions taking part in the program for our COVID-19 Resource Center. Here is an official Q&A document with helpful details: Paycheck-Protection-Program-Frequenty-Asked-Questions.
In addition, the US Senate said yesterday they want to move quickly to add $200-250 million to the PPP. For now, some items outlined include the below.
The loan amounts will be forgiven as long as:
- The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the eight-week period after the loan is made; and
- Employee and compensation levels are maintained.
- Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
- Loan payments will be deferred for six months.