US Chamber CARES Small Business Guide and Checklist
PPP--Fact-Sheet from Treasury Dept (also see directly below)
For small to midsize businesses (less than 500 employees) that have been affected by COVID – 19, April 3, 2020 is the commencement day of the Paycheck Protection Program loan. It is possible that the funds will run out quickly so your application should be submitted soon.
Here’s a summary of the program:
The Paycheck Protection Program
Under the Paycheck Protection Program ("PPP"), the Small Business Administration ("SBA") is authorized to guarantee a new category of $349 billion in forgivable loans to help businesses fund payroll, loan interest, rent and utility expenses. The program provides loans equal to up to eight weeks of payroll and other qualified costs, up to $10 million, with an interest rate of .5%.
PPP loans may be deferred for at least six months and up to one year and, if employers maintain their payroll, the loans may be forgiven. Small businesses are eligible to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. Loans are available through June 30, 2020.
| Limit | · 250% of average monthly payroll expenses, up to a total of $10 million. |
| Term | · a fixed interest rate of 1% with no prepayment penalties and no loan fees. |
| Eligibility Requirements | · Business must have been in operation on February 15, 2020. Eligible businesses include:
· (i) businesses with fewer than 500 employees; · (ii) a small business that otherwise meets the SBA's size standard; · (iii) a 501(c)(3) with fewer than 500 employees; · (iv) an individual who operates as a sole proprietor; · (v) an individual who is self-employed who regularly carries on any trade or business; · (vi) a Tribal business concern that meets the SBA size standard; and (viii) a 501(c)(19) Veterans Organization that meets the SBA size standard. · Additionally, statutory exemptions are made in the legislation for: · (i) franchise and hospitality businesses with multiple locations, whereby the 500 person limitation is tested on a per location basis; and · (ii) any business receiving financial assistance from a Small Business Investment Company. |
| Collateral and Guarantee Obligations | · No personal guarantee and no collateral are required. |
| Eligible Payroll Costs | · Compensation (salary, wage, commission, or similar compensation, payment of cash tip or equivalent);
· Payment for vacation, parental, family, medical or sick leave; · Allowance for dismissal or separation; · Payment required for the provisions of group health care benefits, including insurance premiums; · Payment of any retirement benefit; and · Payment of state or local tax assessed on the compensation of employees. |
| Allowable Loan Proceed Use | · Payroll costs (noted above);
· Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; · Employee salaries, commissions, or similar compensations; · Interest payments on mortgage obligations; · Rent; and · Utilities. |
| Forgiveness | · Loans can be forgiven up to the sum of the following payroll costs incurred during the covered 8 week period compared to the previous year or time period, proportionate to maintaining employees and wages (excluding compensation over $100,000):
o Payroll costs plus any payment of interest on any covered mortgage obligation (not including any prepayment or payment of principal on a covered mortgage obligation) plus any payment on any covered rent obligation plus any covered utility payment. |
See the Dept. of Treasury information sheet. The last page is not from the Dept. of Treasury and enclosed for convenience of reading.