The U.S. Department of the Treasury has created a robust website with information on various issues facing businesses during the pandemic. The Paycheck Protection Program is part of that, and new FAQs were released yesterday in association with PPP.
The loans, which are 100% backed by SBA, are being provided to small businesses without collateral requirements, personal guarantees, SBA fees, or credit elsewhere tests. Those eligible for the program include small businesses, certain non-profits, veterans’ organizations, self-employed individuals, independent contractors, and other businesses meeting size standards based on their North American Industry Classification System code.
The Paycheck Protection Program’s maximum loan amount is $10 million with a fixed 1% interest rate and maturity of two years.
The loans are available to cover up to eight weeks of average monthly payroll (based on 2019 figures) plus 25% and payments are deferred for six months (interest does accrue). The SBA will forgive the portion of loan proceeds used for payroll costs and other designated operating expenses for up to eight weeks, provided at least 75% of loan proceeds are used for payroll costs.
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, issued an update to Frequently Asked Questions yesterday.
Read more here.