Paycheck Protection Program
An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.
Signed into law on 3/27/2020, lenders are still pending guidance from the SBA on paperwork requirements and protocol for processing and funding. No loan applications can be progressed until this guidance is received. Submissions are held in to be processed state until that time.
- You can apply through the Quick App
- Loan amounts up to $10,000,000 (The maximum loan amount is the lesser of $10,000,000 or the product obtained by multiplying average total monthly payments for payroll costs during the 1-year period before the loan is made by 2.5. So if the loan was made on April 1, 2020, and average monthly payroll costs for the period April 1, 2019, to April 1, 2020, were $1,500,000, the maximum loan amount would be $3,750,000. Payroll amounts over $100,000 per person, will be excluded from the calculation).
- No minimum credit score guidelines
- Interest rates will not exceed 4% for eligible for-profit and non-profit businesses
- Fully amortizing loan terms of 10 years
- Loans proceeds to include payroll support (including paid sick or medical leave), employee salaries, mortgage payments, insurance premiums and any other debt obligations incurred before 2/15/2020
- SBA guarantee fees and lender fees will be waived
- No prepay penalty and no personal guarantees
- The “credit elsewhere” test and collateral requirements would be waived during the covered period (this means that if you can get a loan “credit” through a non-disaster relief program, you can still get a loan under the CARES Act)
- A borrower with a current EIDL loan can only also receive the CARES Act SBA 7(a) Relief Loan if the EIDL loan is unrelated to COVID-19
There are very few borrower requirements outlined in the bill to obtain a loan under the new program. Those requirements include a good-faith certification that:
- The loan is needed to continue operations during the COVID-19 emergency;
- Funds will be used to retain workers and maintain payroll or make mortgage, lease, and utility payments;
- The applicant does not have any other application pending under this program for the same purpose; and
- From February 15, 2020 until December 31, 2020, the applicant has not received duplicative amounts under this program.
We will do our best to keep you informed as new details are uncovered.