Starting April 10, 2020, independent contractors and self-employed individuals can apply. The Department of Treasury and SBA is encouraging those who need assistance to apply as quickly as you can because there is a funding cap. Below, find additional information on the final overview provided by the Department of Treasury, the borrower application form and an eligible lender lookup.
President Trump signed the CARES (Coronavirus Aid Relief and Economic Security) Act Friday, March 27, 2020. The CARES Act provides significant relief in terms of financial assistance to nonprofits, businesses and individuals, including new and expanded Small Business Administration loans. Click here for a summary of the full act.
We will continue to monitor and keep you updated on the impact of this bill and other regulatory changes.
Expansion of SBA Programs and Assistance to Small Businesses
If your business has been negatively affected by the shutdown, there are two options for SBA Loans. We specifically want to inform you of the Paycheck Protection Program.
SBA Paycheck Protection Program
This is the newest SBA loan program enacted into law on March 27. These loans will be made by SBA approved lenders.
The Paycheck Protection Program includes loan forgiveness provisions, which means you won’t have to pay it back. In this program, you can refinance previous SBA loans. You can borrow a maximum of $10 million or your average monthly payroll from the previous year x2.5 plus other approved refinancing, whichever is less. The interest rate will be maxed at 0.5%, and the term of the loan is 2 years. SBA lending fees will be waived, and they do not require collateral.
To be eligible for forgiveness in this program, the money must be spent in the first 8 weeks after the loan is approved. The funds must be spent on payroll, interest on mortgage payments, rent and utility payments. Forgiven amounts are not included as taxable income. There are other provisions to qualify for forgiveness that you should work with a qualified CPA and your lender to determine.