Small businesses with fewer than 500 employees, sole proprietorships, and others can apply for loans under the Paycheck Protection Program (PPP) as of April 3, 2020. The PPP authorizes up to $349 billion in forgivable loans as part of the Federal CARES Act. These loans can be used to cover payroll costs, and most mortgage interest, rent, and utility costs over the eight-week period after the loan is made. Find a program overview here.
Completed applications must be submitted to an approved Small Business Administration (SBA) lender by June 30, 2020. SBA lenders will eventually include most banks, but questions remain about the application process, borrower certification, interest rates, and, given how funds are spent, amount of loan forgiveness. As of this writing, the April 3 rollout has encountered some challenges, as banks and other lenders are still getting comfortable with the new guidelines and waiting for their registrations with the SBA to go through. Expect delays with the application process.
Time is of the essence as current funding is anticipated to go quickly. Providing a complete application with the required loan calculation details and support documentation will place you in a better position to secure funding at this time. Access a Fact Sheet for potential borrowers under the PPP loan program here.
Determining the correct course between a PPP loan, Economic Injury Disaster Loan, tax relief option(s), or a combination of relief remedies will take planning. Contact your REDW relationship manager for guidance on how to navigate the decision-making process in a way that considers the right factors for your business.
REDW is committed to keeping you informed at all times, but especially during a crisis of the magnitude of the COVID-19 pandemic. Stay connected with us on LinkedIn and @REDWLLC. Or check out some of our other updates here.
