Treasury Releases Paycheck Protection Regulations, Application
YOUNGSTOWN, Ohio – The U.S. Treasury Department released detailed information at the close of business today regarding the Paycheck Protection Program that authorizes up to $349 billion in loans to small businesses that keep their employees on the payroll during the COVID-19 pandemic.
The Paycheck Protection Program provides small businesses with funds to pay up to eight weeks of payroll costs including benefits. Funds can also be used to pay interest on mortgages, rent and utilities.
Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll).
Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.
What follows is a brief summary of the guidelines as provided by the Treasury Department:
Loan forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
Small businesses with 500 or fewer employees — including nonprofits, veterans organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors — are eligible. Businesses with more than 500 employees are eligible in certain industries.
Starting April 3, small businesses and sole proprietorships can apply.
Starting April 10, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.
You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.
Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower.
A list of participating lenders as well as additional information and full terms can be found at SBA.gov.
To see all the information provided today by the Treasury Department, CLICK HERE.
Copyright 2022 The Business Journal, Youngstown, Ohio.