Paycheck Protection Program Overview
President Trump signed the largest stimulus bill in American history on Friday, March 27, 2020. The aid package helps individuals, small, and big business alike. Key provisions in the bill include small business loans, namely the Paycheck Protection Program.
|Covered Loan Period||Retroactive to February 15, 2020 through June 30, 2020.|
|Eligible Businesses||Small Businesses, Nonprofits, Tribal Businesses, and Veteran’s Organizations
|Maximum Loan Amount||The lesser of:
For new businesses, the measurement period would be January 1 to February 20, 2020.
The legislation also temporarily increases the maximum amount for an SBA Express loan from $350,000 to $1 million through December 31, 2020.
|Eligible Lenders||SBA and the Department of the Treasury are granted authority to determine additional lenders to administer the program loans.|
|Maturity Schedule||Maximum 10 year maturity after application for loan forgiveness|
|Payment Deferral||Not less than 6 months and not more than 1 year, including payment of principal, interest and fees|
|Terms of Loan Forgiveness||Loan recipients will be eligible for forgiveness for an 8 week period after the loan’s origination date in the amount equal to the sum of the following costs incurred during that period:
The amount forgiven cannot exceed the amount borrowed.
Loan forgiveness will be proportionally reduced if the average number of employees is reduced during the covered period as compared to the same period in 2019. The amount of loan forgiveness will be reduced by the amount of any reduction in total employee salary or wages during the covered period that is in excess of 25% of the total salary or wages.
Lenders have 60 days to issue a decision on the application.
The canceled loan amount will not count towards gross income for tax purposes.
|Waivers||Borrower, lender fees and prepayment fees are waived.|
Good faith certification that the loan is necessary because of economic uncertainty caused by COVID-19 and will be applied to maintain payroll and make required payments.
Borrower must also certify that they are not receiving this assistance and duplicate funds for the same uses from another SBA program.
No collateral or personal guarantee are required.